India Morning Report July 20, 2012: Media earnings, Power Imports and other small fry

Rangebound markets give you time to realise that those who cannot make 30% growth in Net Profits and a healthy 20% rise in Sales are unlikely to get much word of mouth or better traction in the coming years either. Witness import duties increased for Power equipment which have generated adverse reactions from Power producers and even equipment makers. Not that prices of Chinese equipment enjoyed the same price advantage after the 25% depreciation in the rupee. However, as of now there are hardly any power plants being completed either with construction slow and those with standing orders figuring out whether new import duties will apply 

Retrospectively, no, not retrospectively but then when asked to speak publicly on a subject most tend to foul up in India’s Mid Cap sector. That brings us to the rough and tumble of failing print advertising models. Though with strong subsription revenues DishTv was a shoo in winner at INR 5000 M in quarterly sales, and DB and HT Media’s Hindustan Media Ventures did well too. Profits at both DB and HT Media hit a 30% and 5% snag respectively because of rising costs. I would say it is good news that they can soak up such increases in costs and produce profits, but the market did not know the extent of their loss of profitability so the rangebound markets may give you better levels in all three. 

Back to the banks then, Kotak having totted up Gross NPAs to 1.4% and NIMs saddening to 4.7% now at 33% higher than the Industry highs of 3.5% among Private and Public sector banks. Anyone who can get a more than 20% credit growth in their conservative forward statements is a shoo in into any decently managed portfolio as the midday correction on sales growth to INR7.2 B definitely brings in Kotak to a short list. Net Profits of the group were INR 2824 M and I would like them to scale a mark of a 1 B in  profits every quarter so the growth in advances and the 7% campaign’s impact on CASA are welcome.




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