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Sanghvi Movers Ltd -Result highlights. Sanghvi Movers Ltd (SML) has reported strong performance during Q3FY2009,both on revenue and profitability front. SML’s income from operation grew by 37.8% to Rs88.8 crore led by better-than-expected utilisation and higher yields. The operating performance of the company surprised positively with a 290-basis-point year-on-year (y-o-y) improvement in the operating profit margin (OPM) to 75.7%. on account of a decline in the operating cost. The net profit increased by 34.8% to Rs23.9 crore as against our estimate of Rs18.6 crore. The profits were higher mainly due to a better top line growth coupled with better operating performance and high other income component. The other income was high due to sale of an old crane, which realised Rs1.9 crore. The company has added Rs55 crore worth of cranes during the period under review. The total fleet size of SML now stands at 323 cranes, accordingly the gross block of the company now stands at Rs950 crore.

Thermax - Result highlights. Thermax’ Q3FY2009 results were below expectations on revenue front, however owing to better-than-expected operating performance and lower tax the adjusted net profit came in line with estimate. The stand-alone total income from operations reported a decline of 6% to Rs795.1 crore. Revenue from energy division continued to be disappointing as it declined by 9% to Rs628.3 crore, while the revenue from environment division grew by a decent 14.1% year on year (yoy) to Rs185.3 crore. During the quarter the company provided for marked-to-market (MTM) losses of Rs10.6 crore as against a net gain of Rs2.4 crore in Q3FY2008. Adjusting for the same the operating profit of the company rose by 2.35% to Rs107.4 crore. The operating profit margin (OPM) improved by 110 basis points yoy to 13.5% on account of decline in raw material cost as percentage of sales by 510 basis points yoy to 65.6%. The adjusted net profit of the company was up 8% to Rs79.3 crore.Accounting for

Opto Circuits India -Result highlights. Strong performance continues; concerns overdone. Opto Circuits (Opto) has reported a top line growth of 65.7% to Rs211.0 crore for Q3FY2009. The revenues were driven by a 20% growth in the non-invasive segment (excluding Criticare Systems [Criticare]) and an 81.9% growth in the invasive segment. Criticare contributed revenues of Rs40.4 crore. On excluding the contribution from Criticare, the organic growth was ~34%. Opto’s operating profit margin (OPM) expanded by 60 basis points year on year (yoy) to 28.9% in Q3FY2009. The margins are impressive considering the consolidation of Criticare, which has relatively lower margins.Consequently, the operating profit grew by 69.3% to Rs60.9 crore in Q3FY2009. Driven by a strong operating performance, Opto has reported a net profit of Rs52.6 crore, up by 47.2% yoy. The net profit reported by the company is marginally ahead of our estimate of Rs49.0 crore. The net profit was aided by a foreign exchange (fo

Indian Hotels Company - Results Highlights. The revenues and margins are strictly not comparable on a year-on-year basis, as the operating revenues include Rs26.36 crore of insurance claims for loss of profit on Taj Mahal Palace & Tower, which was non-operational due to damages sustained during 26/11 terrorist attacks. The operating revenues declined by 12.3% year on year (yoy) to Rs456.6 crore due to substantial drop in occupancies and subdued average room rates (ARRs) yoy. The management clarified that despite the economic slowdown their ARRs and occupancy rates were holding good, however post 26/11 there have been significant cancellations and the month of December played a spoilsport for Q3FY2009 results. The occupancy rate in December 2008 dropped to 50% against 74% in December 2007 and 67% in April-November 2008. ARRs for the month were lower by 15.4% yoy. Consequent to subdued top line performance the operating margin declined from 47% in Q3FY2008 to 36.3% in Q3FY2009, whic

Andhra Bank - Results Update. Andhra Bank has reported a profit after tax (PAT) of Rs212.7 crore in Q3FY2009 indicating an increase of 33.7% year on year (yoy). The net interest income (NII) for Q3FY2009 registered a healthy growth of 29.3% yoy and stood at Rs451.9 crore on account of a strong 34.2% year-on-year (y-o-y) growth in the advances coupled with an 8-basis-point y-o-y increase in the calculated net interest margin (NIM), which stood at 2.88%. The operating expenses increased by 28.9% yoy during the quarter as employee expenses increased at a much faster pace of 40.9% yoy, while other operating expenses grew by 16.5% yoy. During the quarter the bank made an ad-hoc provision of Rs40 crore towards pending settlement for wage revision. However, despite this increase the cost to income ratio was contained at 44.3% in Q3FY2009 vs 51.1% in Q2FY2009. Notably the provisions declined by 10.5% yoy to Rs24.9 crore as compared with Rs27.8 crore in Q3FY2008, which boosted the bottom line.

Vote-on-account: • The vote-on-account, with impending general elections, stuck to convention and did not contain any major announcements / initiatives. • Revised FY09 revenue and fiscal deficits are estimated at 4.4% and 6%, respectively - significantly above the budgeted levels, but in line with consensus estimates • Fiscal deficit for FY10 is budgeted at 5.5% and revenue deficit at 4% of GDP; Budget assumes a 10% rise in corporation tax and a similar rise in income tax in FY10, which may be challenging to achieve in the backdrop of a weak economic environment. • No sector specific incentives announced except extension of interest rate subsidy for labour intensive export operations. Major initiatives to be taken up only in the full budget to be unveiled by the new Government, post elections • With no major triggers in the near term, markets will now look at the elections and international factors over the next two months. Monetary measures, if any, will have an impact in the intermed

Maruti Suzuki India - Result highlights. Maruti Suzuki’s Q3FY2009 results are ahead of estimates after some adjustments. The net sales for the quarter declined by 1.9% to Rs4,567.6 crore (adjusting for Rs55crore of compensation paid to dealers due to a reduction in the excise duty). The sales volume for the quarter dropped by 14% and the average realisation improved by 14% due to a change in the product mix towards the B and C segment cars. The operating profit margin (OPM) is lower than expectation. The OPM declined by 649 basis points year on year (yoy) to 6.6% during the quarter. The margin contracted due to a higher cost of raw materials. The depreciation in the rupee against the yen further increased the cost of imported raw materials for the company. This coupled with the higher fuel cost, royalty charges, A-Star launch expenses and an increase in distribution expenses led the operating profit for the quarter to decline by 50.4% to Rs304.3 crore (excluding a foreign exchange [fo

Interim Railway budget. Growth targets maintained despite slowdown, sixth pay commission impacts operating ratio, passengers get some relief Interim budget was largely in line with expectations with no major strategic initiatives announced for the next fiscal While freight rates maintained at FY09 levels, marginal relief has been given on passenger fares The growth targets for freight volumes and total earnings have been maintained at the budgeted levels despite the economic slowdown. Significantly high expenditure for the sixth pay commission as compared to the budgeted levels has dented operating ratio at 88.3%. Ratio for FY10 expected to remain at those levels.The total plan outlay target has been marginally revised to Rs.367.73bn for FY09. Mr. yadav has set a target to invest Rs.2.3trn over the 11th five year plan. Key points. FY09 growth targets maintained despite slowdown. The budget has maintained the targets for growth in FY09 at near the budgeted levels. Gross earnings are exp

Zensar Technologies. As was the case last year, Zensar has introduced an offering for its customers, which assures a 10% savings in cost over a 10-month time frame by improving the processes of the customer company. Zensar is merging its wholly - owned subsidiaries Zensar ThoughtDigital LLC and Zensar OBT Technologies Inc with Zensar Technologies Inc. Challenges have emerged in the enterprise applications business with both, SAP and Oracle related implementations facing a slowdown. Future prospects. We expect Zensar to achieve revenues of Rs.9.49bn in FY09 and Rs.9.5bn in FY10. While volumes are expected to rise by about 6%, expected billing rate pressures and rupee appreciation are expected to impact revenue growth. EBIDTA margins are expected to be almost flat as gains from higher off-shore content and better resource utilization should set off the impact due to salary increases and expected rupee appreciation. Higher revenues from value added services are also expected to restrict t

Results Update:Cummins reported stellar earnings growth for Q3 FY09 mainly aided by strong export volumes and margin expansion as a result of rupee depreciation and softer metal prices. However, during the third quarter, the company witnessed a degrowth of 12% in the domestic sales. Given the lackluster scenario in the domestic market coupled with lower export demand, the management has indicated that order book for the current quarter indicates likely degrowth of 20 - 30% on a sequential basis. Management guidance of 15-20% decline in FY10 revenues. In 9M FY09, revenues grew 35% yoy mainly led by strong export volumes. During the period, export revenues likely grew 91% yoy to approximately Rs 10.1 bn. Sharp hike in export volumes was a result of new low HP engine facility at Pirangute and the High HP KVA facility in Kothrud. Share of exports in revenue mix increased to 47% from 31% in FY08. On the other hand, domestic market growth has been modest during the nine-month period. The out

Economy Update: Inflation falls to 5.07%. India's wholesale price index (WPI) came down to 5.07% for the week ended January 24, 2009 from 5.64% for the week ended January 17, 2009, lowest in almost last one year. The index number of 'primary articles' and 'manufactured goods' declined week-on-week for the week ended January 24, 2009.However, 'Fuel segment' saw some moderate up move during the same period. 'Fuel segment' continues to witness deflation for last seven consecutive weeks. Recent cut in fuel prices would start showing its impact from the next week's reported numbers. Manufacturing segment is largely on the downward trajectory for last two months, consequently, reducing the inflation risk emanating from it.One can expect headline Inflation (read WPI) to continue to fall at an accelerated pace before coming down to sub-2.0% levels by the end of FY09.

Balaji Telefilms : Lower volumes due to discontinuation of Star programs and FWICE strike lead to crash in revenues. Higher costs of production and deteriorating pricing power for content players crunch profitability. Balaji Telefilms has been underpinned by discontinuation of high margin programs (on Star), foray into new high budget programming, lack of scale in business, waning popularity of its content and an expected erosion of pricing power as recent GEC entrants face tough times. Adjust earnings and price target to account for dismal Q3FY09 results and deteriorating business outlook for content players that are unable to drive scale. While the stock has corrected 36% over the last 3m, it makes us no less negative on BTL’s medium term prospects. Multiple headwinds persist and will lead to sharp declines in profitability over FY09-10E.

Sesa Goa · Highest ever iron ore sales volumes in tough Q3 is commendable. · Chinese Steel/Iron Ore Industry Macro is improving. · Q4 traditionally the best quarter but can't ignore global macro stress – 5MT volume assumed for Q4 against 5.44MT in Q3. · Amalgamated estimates from now on – No material change as pig iron operations small. · Attractively valued - BUY with a price target of Rs.123 based on 2.5x EV/EBITDA for FY09E.

Subex Results are in-line with estimates. No major impact of the macro scene as yet on Subex, as reflected by steady order inflows. Stock price has declined significantly over past few quarters. While we are upgrading the stock because of the sharp decline in price, we still recommend ACCUMULATE as the macro scene remains challenging. Uncertainty over FCCB conversion remains. Our FY09 EPS earnings estimate of Rs.13 does not include MTM losses on FCCBs. The price target stands reduced to Rs.55 from Rs.65 earlier.

Voltamp Transformers Voltamp's revenues reflect signs of moderation in growth and lower realistions as a result of decline in copper prices. EBITDA margins came at an all-time high of 30% up 740 bps possibly as a result of efficient sourcing of raw material and lower base of revenues. High other income of Rs 75 mn and lower tax rate boosts profit growth. Raise earnings estimates by 20% for FY09. Accumulate in view of impending slowdown in revenue growth in view of lackluster industrial growth, with a target price to Rs 450.Stock trading at 3.3x FY09 earnings.

Result Update: Shree Cements Revenues for the current quarter Q3FY09 grew by 27% YoY, which was better than our estimates led by better dispatch growth as well as sale of captive power. Operating margins were impacted by high power and fuel and transportation expenses. Healthy revenue growth as well as decline in depreciation charges resulted in 254% growth in the net profits in the current quarter as compared to Q3FY08. At current price of Rs 500, stock is trading at 2.5x and 3.0x on P/CEPS multiples on FY09 and FY10 estimates respectively. ACCUMULATE the stock with a price target of Rs 627 based on average of 4x P/CEPS and 3.5x EV/EBITDA on FY10 estimates.