India Earnings Season: A flurry of losses IOC, Ranbaxy

Graph showing Indian rupee and U.S. dollar exc...
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Ranbaxy’s brilliant $126 mln loss in Foreign exchange as it has not yet settled with FDA days before it starts its exclusivity period on Lipitor. The long term contracts , much like the State’s Oil contracts are going to cost India can be visibly seen this quarter. Even 75-100% hedging of receivables by Big Four IT like HCL Tech will be something to shed oil on, fueled by the others willing to run Double or Quits options on Rupee;’s appreciation again. The Rupee has already crossed 50 and with no state intervention and all trade flows mapped out to outflows, India is singularly vulnerable as runs on Europe wipe out investor capital and militarily active China remains a sad trade option at best

Indian Oil

IndianOil produced a giant $1.5 bln loss at INR 74.56 bln, bucked by State Oil procurement expenses of INR 957.88 bln for the quarter, a huge figure even when sales rose by 15% year on year as the subsidy bill becomes an alarming figure for ONGC, IOC and the state that has to decide how much it will be able to afford.


Spurred by the FX loss (pun intended) Ranbaxy reported a INR 4.65 bln or $93 mln loss for the quarter, wiping its slate clean of all evil capitalist trappings. The Japanese owned Pharma major has sales of almost a $95 mln in North America without its exclusivity prd sales from Lipitor-generic-X out of a total of INR 20.27 bln or $405.4mln. Europe is another 16.3% of Sales at $66mln or INR3.3 bln (Figures courtesy (mint)) Domestic sales grew slowly but remained a cool $103 mln in India


Comparatively, India’s slow and ugly Power sector continued to spur a large expansion and good NIMs in Power lending as PFC grew 24% to sales of INR31.45 bln even as profits were limited to INR4.19 bln or $84mln REC infact managed to keep NIMs stable while PFC has grown Income and old loans apparently may have been sloughing off than restructuring issues for its customers(lendees)


Sister company PTC meanwhile could not hold on to Sales reporting INR 23.69 bln in Sales and a lower INR 355.7 mln in profits, but the company has not done much from its year ago portfolio yet


The RPG owned Calcutta utility had trouble in profitability too much in lin e with industry as it still managed a profit of more than $22 mln or INR1.1 bln (25% lower than FY11 September 2010) as Sales grew marginally to INR 127 bln or $2.5bln


Opto is a great buy as it jumped profits on to INR 1.21 bln from 0.77bln last September with Sales of INR 5.56 bln a healthy margin and assured sales on contracted export deliveries till 2015 Sales grew 70% and Profits 56%. (A lot of help from for the figures)

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