Lupin Q4 profit up 36% – Positive for medium to long term
Lupin posted a fourth-quarter consolidated net profit of Rs.5.53bn, up 35.5% YoY. Consolidated net sales were Rs.30.52bn up 20.3% YoY, while other operating income totaled Rs. 0.69bn, compared with Rs. 0.48bn in the year-ago quarter. EBITDA grew by 32.7% to Rs. 8.82bn during the quarter. EBITDA margin improved by 270bps to 28.7%.
US and Europe formulation sales (including IP) grew by 28% to Rs. 15.49bn, contributing 51% to overall sales. India formulations business grew by 2% recording revenues of Rs. 5.76bn. Japan Sales grew by 17% clocking net sales of Rs. 3.22bn. Overall the results were above market expectations.
Paper Products Ltd (PPL) post 1QCY14 result inline with expectation – Accumulate; Will revise our rating post concall
For 1QCY14, PPL consolidated net sales increased by 13.5% YoY to Rs 2890.3 mn. Gross margin contracted by 250bps YoY and expanded by 70bps QoQ to 29.0% The compression of margin on YoY basis is likely due to favourable currency impact in the base qtr. The price hike initiated by the company in 4QCY13 is yielding result and has led to expansion of margin in 1QCY14. Overall, EBITDA was flat at Rs 289.5 mn and EBITDA margin contracted by 150 bps YoY and expanded by 110 bps QoQ to 10.0%. The company has booked exceptional gain of Rs 12.5 mn on account of sale of its Nariman Point property. Reported PAT (after MI) increased by 4.7% YoY to Rs 169.2 mn. Adjusted PAT declined by 1.3% YoY to Rs 159.5 mn.
Overall, the company has posted decent set of numbers in weak volume growth scenario of underlying industries and has shown healthy improvement in performance on QoQ basis. We await further details from management in the concall tomorrow and will update our estimates/rating, post concall.
National Economic News
No more penalty for paying loans early: RBI to banks
Providing relief to borrowers, Reserve Bank on Wednesday directed banks not to levy any penalty on individual borrowers for pre-paying floating loans. “…it is advised that banks will not be permitted to charge foreclosure charges or pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect,” RBI said in a notification. Floating loan products include housing, corporate, vehicle and personal loans.
World Economic News
China exports and imports throw a positive surprise. Rise YoY
China’s exports and imports unexpectedly rose in April. Overseas shipments increased 0.9% from a year earlier while imports gained 0.8%, leaving a trade surplus of $18.46 bn.
U.S. consumer credit posts largest gain in a year
U.S. consumer credit recorded its largest increase in a year in March, boosted by growing demand for student loans and household borrowing to buy automobiles. Total consumer credit increased by $17.53 billion to $3.14 trillion, the Federal Reserve said on Wednesday. That was the largest rise since February 2013