Date:October 5, 2009
Ref. No. MPML/pms/322/2009
Dear Investor,
Subject: Likely stars of this result season
Let's take a look at the likely stars of this result season, i.e. quarter ended September 2009. By likely stars, we mean companies, which are expected to post a high growth in their profits.
Idea Cellular - the fifth-largest mobile operator in the country is likely to throw some surprises following robust subscriber growth in the September quarter. Idea has been adding over 1.5 million subscribers per month compared to 1 million a year ago. This is on account of acquisition of Spice Communications last year, which paved way for the company in Punjab and Karnataka and Idea's own organic expansion into circles of Mumbai and Bihar . The stronger subscriber addition is expected to offset declining average revenue per user (ARPU). Reckoned year-on-year, net profit is expected to more than double to Rs 357.4 crore backed by 43.6% jump in revenue at Rs 3,307 crore.
ACC is expected to post 62% growth in net profit driven largely by lower operational costs, coupled with improved realisations on an all India basis. ACC's cement despatch volumes rose 2.8% to 5.06 million tonnes in the second quarter of FY 2010, while its realisations on a per tonne basis rose an estimated 3.75%. At first glance, it does appear that for players like ACC, demand from government funded infrastructure projects and rural housing projects have not shown signs of weakening. Nevertheless, lower operational costs like power & fuel is expected to be key profit driver for ACC.
Hero Honda has surprised the investors so consistently. In this quarter, the company is expected to maintain its dream run with net profit estimated to go up by 90% to reach an all time high of Rs 580 crore. The earnings will be driven by higher sales volume up 22% and nearly 800 basis points reduction in raw material cost due to lower metal prices. However, other players in the sector are revving-up and it would be tough for the company to maintain the current volume growth in next two quarters.BHEL is expected to report 44% growth in profits in the second quarter of FY 2010 thanks to continued inflow of orders and falling raw material costs. The company maintains almost one year of raw material inventory. It has not seen any gain from softening commodity prices until June 2009 quarter. But it is certain to see significant drop in its raw material costs in September 2009 quarter. There may be some lowering of employee cost as a percent of sales, leading to better operating margins, which had risen after the wage revision last year.
The investors are advised to keep a keen eye on the developments in this result season. As the first half of FY 2010 has gone, the results for quarter ending September 2009 will play a crucial role in the stock market .
Source: The Economic Times
Thanks and regards,
PMS Team