Big Five Q3-FY12 Earnings of India Inc.

While the Q3-FY12 earnings season is hardly half way through, corporate results of most highly rated large companies – such as Infosys, HDFC, HDFC Bank, ITC, TCS, HCL Tech, Reliance Industries, Bajaj Auto, Hero MotoCorp, Wipro and Axis Bank – are already out.

Despite IT biggies forking out decent third quarter numbers aided by depreciating rupee, the prospects of flat fourth quarter outlook by Infosys softened up the tone in the outsourcing industry. In addition, we have initiated a detailed coverage on Infosys and TCS results in our earlier post.

To add to the gloom, Reliance Industries yesterday announced below expected results, shocking the Street altogether. Here’s a sneak peek into top results announcements during the last fortnight:

Reliance Industries

A shocker to say the least – that’s how I would describe a drop in RIL’s net profit by 13.5% to Rs.4440 crore for the quarter ended December 2011. In fact, a healthy jump of 40% in RIL’s turnover indicates benign demand growth for its products, whilst contracting refining margins.

RIL’s gross refining margins dipped even below the Singapore benchmark of about $8/bbl, at $6.80 per barrel, dismally down from $9/bbl during a year-ago period. The diversified conglomerate has promised $2 billion of buyback plans at a 10% premium over current price – which is unlikely to enthuse investors by much.

ITC

ITC, India’s diversified FMCG firm, surpassed market estimates by posting larger-than-expected 22% jump in third quarter profits at Rs.1701 crore, on net sales of Rs.6195 crore during the period. But, a lower 5% volume growth from its mainstay cigarette business has concerned investors to some extent.

Revenues from ITC’s consumer goods business other than cigarettes division grew by 24.37% to Rs.1370 crore; amidst a loss of Rs.46.63 crore during the quarter ended December 2011. However, the cigarettes-to-hospitality major was better off given all the price hikes and launch of premium brands in the FMCG space.

HDFC Bank

The results of this private bank are always consistent as a ship sailing in stable waters – and, mind it, the storm is almost always ruled out in the vicinity of the waters it sails in. While the lender’s NIMs were at 4.1% in the quarter, its NPAs were stable at 0.2%.

HDFC Bank has yet again reported a rock-solid third quarter net profit at Rs.1430 crore on robust growth in retail lending, up 31.4% from Rs.1087 crore during the corresponding quarter last year. The bank’s overall loan book grew by 22% Y-o-Y to Rs.1.96 lakh crore.

Wipro

Historically, Wipro has been the most under-stated IT company amongst the pack in terms of being in major news or limelight. Last time I remember this software exporter being in news was during its execution of string-of-pearls acquisition plan almost three years ago.

During Q3-FY12, the IT major reported a 10% rise in its consolidated net profit at Rs.1456 crore from its soap-to-software businesses, aided by weak rupee and strong demand for its consumer care products; on the revenues of Rs.9997 crore. Revenues from the software services exports jumped by 28% on a year-on-year basis to Rs.7608 crore.

Bajaj Auto

The two-wheeler major was recently in news on its unveiling of the budget car RE60, powered by a typical 200 cc water cooled DTSi petrol engine. By this ultra-low four-wheeler car, Bajaj Auto aims to woo drivers of motorized three-wheeler rickshaws to go for its affordable enclosed model.

[Recommended Read: Comparison of Bajaj RE60 vs. Tata Nano]

Coming back to Q3-FY12 earnings, Bajaj Auto posted its second slowest net profit growth in three years at Rs.795 crore, up 19.20% from a year-ago period, hit by challenging business environment and forex losses. The two-wheeler major sold 9.46 lakh motorcycles in the quarter ended December 2011.

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