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Shares of SRF Ltd gained 5.92% to Rs 8,114.05 apiece as net income in the June quarter beat average analyst estimates.
Net income up 3.8% at Rs 395.28 crore vs estimate of Rs 346 crore
Revenue from operations Rs 2,699.40 crore vs estimate of Rs 2,472 crore
Total costs up 3.28% to Rs 2,178.27 crore
Other income up 6.33% to Rs 13.78 crore
Managing Director of SRF Ashish Bharat Ram said that the second wave of Covid infections had an adverse impact on certain raw material prices and disrupted demand and supply chains in some business segments. However, he expects Covid-19 would not have any material impact on its liquidity or ability to service its debt or other obligations.
Out of the 25 analysts tracking the company, 17 maintained ‘buy’, 4 maintained ‘hold’ and 4 analysts maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg hints at a downside of 7.8%. .
Pfizer Ltd reported net income for the first quarter that beat the average analyst estimate.
Net income Rs 200 crore vs estimate Rs 150 crore
Revenue Rs 749 crore vs estimate Rs 683 crore
Total costs Rs 493 crore
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Shares of Dalmia Bharat Ltd. shed 5.34% to Rs 2,130.00 apiece after reporting a sequential decline in net profit in June quarter numbers released post market hours on Tuesday.
Q1FY22 (Consolidated, QoQ)
Income from operations down 17.7% at Rs 2,589 crore vs Rs 3,146 crore
Net profit down 62.8% at Rs 238 crore vs Rs 640 crore
Total income down 17.9% at Rs 2,615 crore vs Rs 3,186 crore
Total expenses down 19% at Rs 2,243 crore vs Rs 2,769 crore
Earnings per share at Rs 14.23 vs Rs 32.91
Out of the 28 analysts tracking the company, 27 maintained ‘buy’ and 1 analyst maintained ‘hold’ recommendation. The overall consensus price of analysts tracked by Bloomberg hints at a downside of 5.2%.
COMMENTARY AND CONTEXT
Return on Assets at 0.83% for Q1; Return on Equity at 14.44%
CASA ratio at 52.44%, up 489 bps y/y
CRAR at 16.23% vs 13.37% y/y
Provision coverage ratio at 97.42%, compared with 94.71% y/y
Cost of Deposit improved 93bps y/y to 3.72% for 1Q; Cost of Funds improved 98 bps y/y to 3.98%
Corporate, retail loan ratio at 38:62 as on June 30, compared with 43:57 y/y
Recovery from technically written off accounts at Rs 331 crore in 1Q vs Rs 269 crore in 4Q FY21
Bank had Covid-19 related provisions of Rs 863 crore as of June 30
IDBI Bank shares were trading little changed after rising as much as 2.2%
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Shares of Aarti Drugs Ltd. shed 7.3% to Rs 671 apiece after it reported a sequential decline in net profit in the June quarter earnings on Tuesday.
Revenue up 15.7% at Rs 581.6 crore vs Rs 502.7 crore QoQ
PAT down 5.5% at Rs 48.8 crore vs Rs 51.6 crore QoQ
EBITDA down 0.7% at Rs 81.3 crore vs Rs 81.9 crore QoQ
EBITDA margin down 231 bps at 14% vs 16.3% QoQ
Segmental Performance
Revenue for the API segment up 13.8% at Rs 446.5 crore vs Rs 392.1 crore QoQ
Revenue for the formulation segment up 40.1% at Rs 86.5 crore vs Rs 61.7 crore QoQ
Revenue for Specialty Chemicals segment down 1.7% at Rs 47.1 crore vs Rs 47.9 crore QoQ
Adhish Patil, chief financial officer of the company said the margins were impacted due to the sudden hike in prices in more than 20 raw materials during the June quarter.
All three of the analysts tracking the company maintained ‘buy’ recommendation. The overall consensus price of analysts tracked by Bloomberg implied an upside of 41.9%.
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Dr Reddy’s Laboratories should record a quick recovery on the back of new product launches in the U.S., after the Indian pharmaceuticals company posted weak results for its first quarter, analysts said.
Shares of the Hyderabad-based company continued to fall Wednesday after plunging 10.5% Tuesday, following its release of first-quarter earnings that missed consensus estimates. The drugmaker’s earnings were mainly hit by weaker-than-estimated sales in its North American markets.
Earlier this month, the company received a subpoena from the U.S. SEC related to an anonymous complaint about unfair practices in Ukraine. “Our initial take is that while this could be material if the SEC investigation throws up a negative finding, it shouldn’t affect our thesis on the company,” Jefferies analyst Abhishek Sharma writes.
SEC probes are common in the pharma sector and are usually settled without a significant impact on company operations, Sharma wrote, adding that whether the U.S. investigation will throw up anything adverse on Dr. Reddy’s is uncertain.
Here is what analysts are saying about the company’s quarterly earnings performance:
Jefferies (Buy, price target Rs 5,761)
Q1 earnings were impacted by a fluctuation in company’s Pharmaceuticals Services and Active Ingredients business and an increase in selling, general and administrative expenses
The company has, however, guided to better days ahead and sees the weakness as transient
The silver lining is that North America revenues remained flat q/q despite an all-round price erosion which has impacted other U.S. exporters’ Q1 results, the note says
Management sounded confident that margins will recoup from 2Q onwards, led by improvement in PSAI revenues and U.S. launches improving profitability from next quarter
Morgan Stanley (Overweight, price target Rs 5,859)
Dr Reddy’s remains confident about returning to 25% Ebitda margins after reporting 20.7% in Q1, driven by new launches, cost improvement and operating leverage; the company’s strong balance sheet provides opportunity for M&A, especially in India
The company doesn’t see API issues affecting its generic drug Vascepa, which helps lower fats in the blood
It has four products in its biosimilar pipeline, which, unlike its past launches, it will be the first to market
Dr. Reddy’s has also launched a multi-service mobile app platform that integrates doctors, diagnostics, pharmacies and insurance for out-patients; the company has first-mover advantage in this space
Sanofi India Q1FY22
Revenue from operations at Rs 789.1 crore vs Rs 725.1 crore QoQ
Net profit at Rs 178.3 crore vs Rs 145.9 crore QoQ
Total income at Rs 806.2 crore vs Rs 751.4 crore QoQ
Total expenses at Rs 563.6 crore vs Rs 556.5 crore QoQ
Other income at Rs 17.1 crore vs Rs 26.3 crore QoQ
Investors will now be watching the earnings performance of Maruti Suzuki, the country’s biggest carmaker, which will be reporting its results this afternoon. FMCG company Nestle India will also be releasing the numbers today.
Coforge Ltd. reported net income for the first quarter that missed the average analyst estimate.
Net income Rs 124 crore vs estimate Rs 134 crore
Revenue Rs 1,462 crore vs estimate Rs 1,396 crore
Total costs Rs 1,315 crore
Ebitda Rs 236 crore vs estimate Rs 231 crore
Ebitda margin before employee stock options at 16.1% vs 17.1% YoY
Dividend per share Rs 13
COMMENTARY AND CONTEXT
Company planning for FY22 organic growth of at least 19% in constant currency terms, higher than 17% indicated earlier
Total order book up 38.7% YoY to $645 million as of June 30
Order intake increased to $318 million,on the back of three large deals secured during Q1, including a $105 million contract
Total headcount, including employees of recently-acquired SLK Global, at 20,491
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Indian bonds are steady before a Rs 17,000 crore ($2.3 billion) sale of Treasury bills. The rupee also trades little changed ahead of the Fed’s policy decision later on Wednesday.
USD/INR steady at 74.48; pair rose 0.1% on Tuesday
Yield on 6.1% 2031 bond steady at 6.18%; 5.63% 2026 bond yield also unchanged at 5.69%
India’s economic growth estimate for 2021 were slashed by 3 percentage points to 9.5% by the International Monetary Fund
The government collected a net Rs 2.46 lakh crore in the first quarter of the current fiscal year from direct taxes, compared with Rs 1.17 lakh crore a year earlier, junior finance minister Pankaj Chaudhary told Parliament in a written reply on Tuesday
Global funds sell net Rs 1,460 crore of India Stocks Tuesday: NSE
They bought Rs 28 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 325 crore of corporate debt
State-run banks bought Rs 395 crore of sovereign bonds on July 27: CCIL data. Foreign banks bought Rs 2,340 crore of bonds
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