BSEIndia: All Stock Market News: 11/03/07

Saturday, November 03, 2007

$$ DreamGains !! $$ Friday Telefolio : City Union Bank

City Union Bank

On fast track

The bank is expected to grow at a fast rate and is likely to attract many strategic investors once M&A regulations in banking sector are liberalised

Buy	City Union Bank
BSE Code	532210
NSE Code	CUB
Bloomberg	CUBK@IN
Reuter	CTBK.BO
52-week High/Low	Rs 255 / Rs 122
Current Price	Rs 232 (as on 2nd November 2007)

City Union Bank was first formed as The Kumbakonam Bank Ltd.. It was founded in the year 1904 by a devoted group of prominent and enterprising citizens of Kumbakonam town in Tamilnadu. In 1965, under a scheme of amalgamation, two other local banks, The City Forward Bank Ltd., and The Union Bank Ltd., were amalgameted with it and consequent upon this, the name was changed to 'The Kumbakonam City Union Bank Ltd.'. In the process of building up of an image of national character, the name of the bank was changed to the present name 'City Union Bank Ltd.' in the year 1987.

The Bank is one of the leading scheduled commercial Banks in the Private Sector with a hoary tradition and excellent track record with a strong base in Urban, Semi-Urban and Rural Centres in South India.

Impressive September quarter performance

For the quarter ended September 2007, its interest income grew 52% to Rs 147.77 crore, while interest expenses were up 79% to Rs 95.54 crore. This took net interest income up by 19% to Rs 22.19 crore.

Other income was up 77% to Rs 22.19 crore and net total income grew 32% to Rs 74.42 crore.

Operating expenses were up by just 26% to Rs 26.24 crore. this took its operating profits up by 35% to Rs 48.18 crore.

Provision and contingencies were down by 32% to Rs 7.49 crore. this took its PBT up by 65% to Rs 40.69 crore. Even as tax grew 67% to Rs 13.89 crore, PAT soared 64% to Rs 26.80 crore.

For the six months ended September 2007, its interest income grew 49% to Rs 276.31 crore, while interest expenses were up 67% to Rs 174.09 crore. This took net interest income up by 25% to Rs 102.22 crore.

Other income was up 71% to Rs 35.39 crore and net total income grew 35% to Rs 137.61 crore.

Operating expenses were up by 33% to Rs 53.03 crore. This took its operating profits up by 35% to Rs 84.58 crore.

Provision and contingencies were down by 14% to Rs 15.21 crore. This took its PBT up by 55% to Rs 69.37 crore. Even as tax grew 65% to Rs 21.22 crore, PAT soared 51% to Rs 48.15 crore.

Impressive key ratios

The Advances portfolio as at September 30, 2007 was up 43.18% to Rs.3817 crore as compared to Rs 2665 crore as at September 30 2006. Deposits as at September 30, 2007 were up 67.35% to Rs 5433 crore as compared to Rs 3844 crore as at September 30, 2006.

The Bank achieved a balance sheet growth of 40%, from Rs. 4393 crore as at September 30, 2006 to Rs 6147 crore as at September 30, 2007. The total Shareholders’ funds as at September 30, 2007 stood at Rs 414 crore. The Bank’s capital adequacy ratio was 12.85% for the first-half of 2007-08 as against the stipulated minimum of 9%.

Gross NPAs stood at 2.02%. The Bank has given greater thrust on minimizing the quantum of non-performing assets and as a result of persistent efforts on recovery, net NPA has come down from 1.90% to 0.85% as on September 30, 2007.

The bank had Return on Average Assets of 1.66%.

Aggressive growth targets

The Chairman of the bank S.Balasubramanian said that the performance of the bank during the half year has been on the budgeted lines and was confident that the bank is poised to achieve Rs 12000 crore total business by March 2008 compared to Rs 8000 crore as of March 2007 (growth of 50%).

The bank’s net worth which stands at 414 crore as on 30.09.2007 is expected to be well above 550 crore by march 2008 as the bank has recently allotted equity shares on preferential basis to LIC of India, L&T and certain FII’s fetching Rs 125 crore including share premium.

The bank which opened 26 branches during the last one year is planning to increase the net work of the present 180 branches to 230 branches with in another one year.

In pursuit of excellence in customer service and provision of technology oriented services, the Bank has already adopted Core Banking Solutions in all its branches.

Attractive valuation

In FY 2008, we expect the bank to register net interest income and net profit of Rs 209.68 crore and Rs 107.71 crore respectively. On diluted equity of Rs 25.20 crore and face value of Rs 10 per share, EPS works out to Rs 33.7. The share price trades at Rs 232. P/E works out to just 6.9. Moreover, in FY 2008, its projected P/BV is likely to be just 1.25. The bank is expected to grow at a fast rate and is likely to attract many strategic investors once M&A regulations in banking sector are liberalised in 2009. Already the bank has got the backing of L&T and LIC.

City union Bank: Financials

	0603 (12)	0703 (12)	0803 (12P)
Interest Earned	326.39	400.05	575.94
Interest Expended	186.61	232.56	366.26
Net Interest Income	139.78	167.49	209.68
Other Income	39.53	54.08	92.12
Net Total Income	179.31	221.57	301.80
Operating Expenses	70.16	90.10	118.34
Operating Profits	109.15	131.47	183.46
Provisions & Cont.	39.66	32.55	27.76
Profit Before Tax	69.49	98.92	155.70
Provisions for tax	13.12	27.12	47.98
Net Profit	56.37	71.80	107.71
EPS*(Rs)	17.6	22.4	33.7
* Annualised on current equity of Rs 25.20 crore. Face Value: Rs 10 EO: Extraordinary items Figures in Rs crore; (P): Projections; Source: Capitaline Corporate Databases

City union Bank: Results

	0709 (3)	0609 (3)	Var. (%)	0709 (6)	0609 (6)	Var. (%)	0703 (12)	0603 (12)	Var. (%)
Interest Earned	147.77	97.35	52	276.31	186.03	49	400.05	326.39	23
Interest Expended	95.54	53.33	79	174.09	104.45	67	232.56	186.61	25
Net Interest Income	52.23	44.02	19	102.22	81.58	25	167.49	139.78	20
Other Income	22.19	12.55	77	35.39	20.71	71	54.08	39.53	37
Net Total Income	74.42	56.57	32	137.61	102.29	35	221.57	179.31	24
Operating Expenses	26.24	20.88	26	53.03	39.86	33	90.10	70.16	28
Operating Profits	48.18	35.69	35	84.58	62.43	35	131.47	109.15	20
Provisions & Cont.	7.49	11.04	-32	15.21	17.78	-14	32.55	39.66	-18
Profit Before Tax	40.69	24.65	65	69.37	44.65	55	98.92	69.49	42
Provisions for tax	13.89	8.33	67	21.22	12.86	65	27.12	13.12	107
Net Profit	26.80	16.32	64	48.15	31.79	51	71.80	56.37	27
EPS*(Rs)	33.5	20.4		30.1	19.9		22.4	17.6
* Annualised on current equity of Rs 25.20 crore. Face Value: Rs 10 EO: Extraordinary items Figures in Rs crore; (P): Projections; Source: Capitaline Corporate Databases

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$$ DreamGains !! $$ Wednesday Telefolio : Apollo Hospitals

Apollo Hospitals

In the pink of health

Increasing incidence of lifestyle diseases, medical insurance penetration, medical travel from other countries are growth drivers for the healthcare sector

Buy	Apollo Hospitals
BSE Code	508869
NSE Code	APOLLOHOSP
Bloomberg	APHS@IN
Reuter	APLH.BO
52-week High/Low	Rs 577 / Rs 400
Current Price	Rs 487 (as on 31st October 2007)

Apollo Hospitals is one of the largest integrated healthcare companies in the private sector in India, operating one of the largest hospital networks in Asia. Its primary line of business is the provision of healthcare services. The company generates revenues primarily through Hospital services, Dispensing pharmacies and Consultancy services.

In addition, (i) through Unique Home Health Care, wholly-owned subsidiary, it provides health care services at the patients’ door steps (ii) through Apollo Health and Lifestyle, wholly-owned subsidiary, it provides clinical and diagnostic services, (iii) through Apollo Health Street, an Associate Company, provides medical Business Process Outsourcing ('mBPO') services and (iv) Associate Company, Family Health Plan Limited, provides Third Party Administration ('TPA') services. To enhance its performance and service to customers, it also makes available the services to support business: telemedicine services, education and training programmes and research services.

All round growth

For the quarter ended September 2007, net sales increased by 27% to Rs 280.90 crore. OPM also expanded by 80 bps to 17.4%. Thus OP grew 33% to Rs 48.90 crore. Margins grew on the abck of higher occupancy and higher bed turnaround as well as higher contribution from consultancy services.

However, other income dropped by 70% to Rs 0.80 crore. As interest cost was up 16% at Rs 5.20 crore and depreciation also went up by 17% to Rs 8.90 crore, PBT grew 30% to Rs 35.60 crore.

As tax grew just 25% (effective tax rate fell by 145 bps to 33.7%), PAT increased by 33% to Rs 23.60 crore.

For the six-months ended September 2007, net sales rose to Rs 530.70 crore, up 25%. Improvement of 60 bps in OPM to 17.5% resulted operating profit growing by 29% to Rs 92.80 crore. PBT grew by 45% to Rs 77.30 crore and PAT jumped 53% to Rs 53.60 crore.

For the quarter ended September 2007, Healthcare Services grew 6% to Rs 233.60 crore. PBIT margin improved by an impressive 460 bps to 17.8%. PBIT grew 43% to Rs 41.60 crore.

For the six month ended September 2007, Healthcare Services grew 4% to Rs 443.90 crore. PBIT margin improved by impressive 400 bps to 17.4% and PBIT grew 36% to Rs 77.10 crore.

The company is primarily a hospital service provider, with most of its hospitals offering a broad range of the services including cardiology, oncology, nephrology, laboratory services, radiology and imaging, maternity and day care, general surgery as well as diagnostic and emergency services. It also provides outpatient services, including consultation for a range of ailments, preventive health screenings, laboratory services, radiology and imaging services. It has established centres of excellence in a variety of medical disciplines viz, cardiology, oncology, orthopaedics, cosmetic and plastic surgery, critical care medicine and emergency and trauma care that provides sophisticated treatment services that are offered in the leading hospitals across the world.

The segment contributed 82% of company’s sales and 90% of company’s PBIT.

Pharmacy business has great business potential and possibility of additional value creation

During the quarter, Pharmacy business was in red with a loss of Rs 1.60 crore on sales of Rs 47.30 crore and for the six months Pharmacy sales were Rs 86.80 crore but PBIT loss was at Rs 1.50 crore.

The company’s pharmacy business is among the largest in India, with a network of over 420 outlets as of 31 March 2007. The success of its pharmacy business largely to the brand value and recognition of the Apollo name. Its pharmacies offer a wide range of medicines, surgical, hospital consumables, health products and general 'over-the-counter' products. Its hospital based pharmacies form an integral part of its hospital business. The company operates pharmacies on a 24- hour basis in various locations with high visibility and revenue potential in addition to having pharmacy outlets in all Apollo hospitals. Its stand-alone pharmacies also offer free home delivery to customers living within a five kilometer radius.

Apollo Hospitals has aggressive expansion plans in pharmacy business, which is a high return-high growth sector, commanding the high valuations of retail business. Though currently making losses, this business has potential to create substantial value in future.

Increasing capacities and improving efficiencies

The company had 2,206 owned and 3,085 managed beds as of 31st March 2007 compared to 1,993 owned and 2,783 managed beds the previous year. The total number of beds owned by the Associates, JVs and Subsidiaries as of 31st March 2007 was 1,785 compared to 1,727 in 2006

The major additions in bed capacity during 2006-07 were at Bangalore, Mysore 250 beds.

The company added 107 pharmacies during FY 2007 in pursuance of its pharmacy strategy taking the total number to 420 as of 31st March 2007. The plan is to take the total strength to 1,000 by 31st March 2009:

The occupancy improved from 72% to 77% during the year. The collections per bed day improved from Rs 7,245 last year to Rs 7,563 in FY 2007.

The total number of ICU beds stood at 341 as on 31st March 2007 compared to 305 as of 31st March 2006, an increase of 3.5%.

The total number of operation theatres is 52 as on 31st March 2007 compared to 45 as on 31st March 2006.

The company wide average length of stay (ALOS) stood at 5.5 days compared to 5.7 last year and the collections growth registered an increase of 26% over the previous year

Setting up speciality hospitals

The company has procured 10 acres in Vizag and 7.5 acres in Bhubaneshwar to set up super speciality hospitals in these locations. These hospitals are expected to be commissioned during March 2009. It has also procured 125,000 sq.ft leased building on E.V.R. Periyar Salai to set up Ortho and Cosmetic Center.

Places shares at Rs 605 to raise Rs 426 crore

Apollo Hospitals Enterprise Ltd has informed the Exchange vide its letter dated October 26, 2007 that "The Committee of Board of Directors at its meeting held approved the allotment of 7,047,119 equity shares of face value of Rs 10/- each at a price of Rs 605.07 per share to Apax Mauritius FDI One Limited".

Encouraging macro environment

The Indian healthcare sector is poised to grow at a compounded annual growth rate of 15%, according to the Ernst & Young healthcare survey. Nearly 90% of this growth will come from the private sector. Further, private hospitals in the country are expected to have revenue earnings of $35.9 Billion (Rs 147,154.1 crore) in 2012 compared to $15.5 Billion (Rs 63,534.5 crore) in 2006. Correspondingly, along with a shift in emphasis from socialized to privatized healthcare, the share of the private sector in India's healthcare industry is set for a quantum increase in the coming decade.

Healthcare spending is on an upward track due to a number of reasons. The first is that India lags behind most nations on all key indicators of healthcare delivery e.g., per capita spend, beds per 1000 people, nurses/doctors per 1000 people, insurance penetration etc. Secondly, as Indians become more affluent, there is a greater propensity to spend on health. Another reason is that people are becoming increasingly aware of the need to focus on preventative health and the need to gain access to quality facilities. Access to quality healthcare in the private sector till now has largely been restricted to the affluent class, essentially due to the high cost of delivery. However, this is changing dramatically with the advent of health insurance as a preferred tool to finance most healthcare expenditures. Health insurance is destined to grow exponentially in the coming years with large players entering the market with a wider choice of product offerings & schemes.

The shift in disease profile from infectious diseases to lifestyle diseases is expected to raise cost per treatment. In a study recently done it has been determined that the average spend on lifestyle diseases is Rs 40,500 per inpatient treatment, whilst that on an infectious disease is just Rs 5,520. India's disease profile is also expected to follow the same profile pattern as in the developed economies. Based on demographic trends and disease profile, lifestyle diseases comprising cardiovascular, diabetes, orthopaedics, asthma & cancer have become the most important segments and inpatient spending is expected to rise from 39% to nearly 50% of the total healthcare expenditure over the next few years. Research has shown that Indians have a high propensity for cardiac disease and that approximately 50% of all cardiac patients across the world be Indians by the year 2015.

India's position as a destination for medical value travel (or medical tourism as it is loosely referred to) will also strengthen significantly in coming years.

Overall in a favourable macro environment, Apollo Hospitals will be able to grow at a healthy rate on a sustained basis.

Valuation

In FY 2008, we expect Apollo Hospitals to register sales and net profit of Rs 1113.45 crore and Rs 98.40 crore respectively. On current equity of Rs 58.65 crore (after recent private placement) and face value of Rs 10 per share, EPS works out to Rs 16.8. The share price trades at Rs 487. P/E works out to 29.0.

Apollo Hospitals: Financials

	0503 (12)	0603 (12)	0703 (12)	0803 (12P)
Sales	592.70	707.8	891	1113.45
OPM (%)	18.0	16.2	15.9	16.4
OP	106.70	114.9	141.8	183.13
Other inc.	2.90	11.2	8.5	14.40
PBIDT	109.60	126.1	150.3	197.53
Interest	15.60	11.7	16.4	19.23
PBDT	94.00	114.4	133.9	178.30
Dep.	22.60	26.1	30.8	35.69
PBT	71.40	88.3	103.1	142.61
Tax	22.20	28.1	32.2	44.21
PAT before PPA	49.20	60.2	70.9	98.40
EPS (Rs)*	8.4	10.3	12.1	16.8
* Annualized on current equity of Rs 58.65 crore. Face Value: Rs 10 (P): Projections EPS is calculated after excluding EO and relevant tax Figures in Rs crore Source: Capitaline Corporate Databases

Apollo Hospitals: Results

	0709 (3)	0609 (3)	Var. (%)	0709 (6)	0609 (6)	Var. (%)	0703 (12)	0603 (12)	Var. (%)
Sales	280.9	220.7	27	530.7	424.8	25	891	707.8	26
OPM (%)	17.4	16.6		17.5	16.9		15.9	16.2
OP	48.9	36.7	33	92.8	71.9	29	141.8	114.9	23
Other inc.	0.8	2.7	-70	10.4	3.8	174	8.5	11.2	-24
PBIDT	49.7	39.4	26	103.2	75.7	36	150.3	126.1	19
Interest	5.2	4.5	16	8.7	7.4	18	16.4	11.7	40
PBDT	44.5	34.9	28	94.5	68.3	38	133.9	114.4	17
Dep.	8.9	7.6	17	17.2	15	15	30.8	26.1	18
PBT	35.6	27.3	30	77.3	53.3	45	103.1	88.3	17
Tax	12	9.6	25	23.7	18.3	30	32.2	28.1	15
PAT before PPA	23.6	17.7	33	53.6	35.0	53	70.9	60.2	18
PPA	0	0	0	0	0	0	3.3	0	PL
PAT after PPA	23.6	17.7	33	53.6	35	53	67.6	60.2	12
EO	0	32.5	PL	0	32.5	-100	32.5	0	LP
Net Profit	23.6	50.2	-53	53.6	67.5	-21	100.1	60.2	66
EPS (Rs)*	16.1	12.1		18.3	11.9		12.1	10.3
* Annualized on current equity of Rs 58.65 crore. Face Value: Rs 10 Var. (%) exceeding 999 has been truncated to 999 LP: Loss to Profit PL: Profit to Loss EO: Extraordinary items; FBT: Fringe Benefit Tax EPS is calculated after excluding EO and relevant tax Figures in Rs crore Source: Capitaline Corporate Databases

Apollo Hospitals: Segment Result

	0709 (3)	0609 (3)	Var (%)	% to total	0709 (6)	0609 (6)	Var (%)	% to total	0703 (12)	0603 (12)	Var (%)	% to total
Sales
Healthcare Services	233.60	220.70	6	83	443.90	424.80	4	82	759.80	709.80	7	82
Pharmacy	47.30	0.00	999	17	86.80	0.00	999	16	131.20	0.00	999	14
Others	0.80	35.20	-98	0	10.40	36.30	-71	2	41.00	11.20	266	4
Total	281.70	255.90	10	100.00	541.10	461.10	17	100.00	932.00	721.00	29	100.00
Less: inter-segment revenue	0.00	0.00	0		0.00	0.00	0		0.00	0.00	0
Net Sales	281.70	255.90	10		541.10	461.10	17		932.00	721.00	29
PBIT
Healthcare Services	41.60	29.10	43	102	77.10	56.90	36	90	112.10	89.60	25	74
Pharmacy	-1.60	0.00	PL	-4	-1.50	0.00	PL	-2	-1.10	0.00	PL	-1
Others	0.80	35.20	-98	2	10.40	36.30	-71	12	41.00	10.40	294	27
Total	40.80	64.30	-37	100.00	86.00	93.20	-8	100.00	152.00	100.00	52	100.00
Less: Interest	5.20	4.50	16		8.70	7.40	18		16.40	11.70	40
other unallocable expenditure	0.00	0.00	0		0.00	0.00	0		0.00	0.00	0
PBT	35.60	59.80	-40		77.30	85.80	-10		135.60	88.30	54
Capital employed
Healthcare Services	799.70	721.00	11	78	799.70	721.00	11	78	683.30	599.00	14	76
Pharmacy	61.10	0.00	999	6	61.10	0.00	999	6	38.20	0.00	999	4
Others	164.70	133.20	24	16	164.70	133.20	24	16	175.20	136.50	28	20
Total	1025.50	854.20	20	100.00	1025.50	854.20	20	100.00	896.70	735.50	22	100.00
Add: Unallocable CE	0.00	0.00	0		0.00	0.00	0		0.00	0.00	0
Total capital employed	1025.50	854.20	20		1025.50	854.20	20		896.70	735.50	22
Figures in crore	17.81	13.19	462		17.37	13.39	397
Source: Capitaline corporate database

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$$ DreamGains !! $$ 10Paisa.Com & MidCaps.In

Name of Company (10 PAISA)	CMP	52H/L	PE	BV	ROC	MC	Rate-20	Volume-20
Birla Ericsson Optical Ltd	20.05	28 / 16	0	22.83	-0.98	60	20.04	26683
Ispat Industries Ltd	26.9	33 / 10	27.2	5.2	0	3288	28.47	13002860
MRO-TEK Ltd	43.25	66 / 39	6.7	47.52	19.04	83	45.33	27519
NIIT Technologies Ltd	300.65	425 / 157	13.9	50.55	39.84	1764	360.32	551300
Sanghvi Movers Ltd	182.8	224 / 122	13.7	49.66	24.35	751	187.06	26304
Tainwala Chemicals & Plastics (India) Ltd	12.27	19 / 9	9.9	25.92	5.76	11	12.88	16305
XPRO India Ltd	35.25	63 / 29	25.2	100.3	1.18	37	35.95	8970

Name of Company (Midcap)	CMP	52H/L	PE	BV	ROC	MC	R-20	V-20
Aplab Ltd	93.25	146 / 64	13.2	58.24	14.17	47	76.58	15563
Insecticides India Ltd	66.7	127 / 53	8.7	55.95	28.34	85	59.62	31478
Khaitan Chemicals & Fertilizers Ltd	55	74 / 38	3.9	65.09	15.04	53	51.80	5858
KRBL Ltd	84.9	195 / 68	6	128.16	14.04	206	82.07	74035
NIIT Technologies Ltd	300.65	425 / 157	13.9	50.55	39.84	1764	360.83	558660
Sanghvi Movers Ltd	182.8	224 / 122	13.7	49.66	24.35	751	187.51	25182
Universal Cables Ltd	90.2	136 / 80	12.5	67.99	18.55	209	93.67	13987

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BSEIndia: All Stock Market News

Saturday, November 03, 2007

$$ DreamGains !! $$ Friday Telefolio : City Union Bank

$$ DreamGains !! $$ Wednesday Telefolio : Apollo Hospitals

$$ DreamGains !! $$ 10Paisa.Com & MidCaps.In

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