Analysts' corner: HBL Nife

Brics PCG Research, initiating coverage on HBL Nife, in its company report, recommends a 'buy'. The company has charted a good performance during Q3 FY06 to register sales growth of 27 per cent and a rise of 48 per cent in net profit.

The most inspiring feature of HBL's performance during the year has been the continuous improvement in its EBITDA margins, from 12.8 per cent in Q1 FY06 to 16.3 per cent in Q2 and then 17.7 per cent in Q3.

The report expects this trend to continue, with HBL looking to book even higher margins in Q4 FY06. An increased demand for industrial batteries has resulted in volume growth for the company.

HBL is currently operating at more than 75 per cent utilisation in the nickel cadmium battery segment and over 90 per cent utilisation in lead batteries. It has, therefore, framed an expansion programme to double its capacities in nickel cadmium to 48 million AH, from 24 million AH, and in lead batteries to 105 million AH, from 55 million AH.

Syndicate Bank

IDBI Capital, in its company report on Syndicate Bank, recommends a 'buy'. The report states that Syndicate Bank is a leading public sector bank with a well-knit network of 1,913 branches across the country.

The bank has taken some quick steps in the past one year. A timely exit from the investment portfolio and an immediate focus on credit business are bringing in dividends for the bank.

Fuelled by a favourable investment climate and strong credit demand, the bank is all charged up and is targeting its business to cross Rs one lakh crore by the end of FY07. NIMs in FY06 at 3.42 per cent are higher than 3.22 per cent in FY05 on account of a rising proportion of low-cost deposits.

The bank's balance sheet remains strong with CAR at 13.8 per cent, and over 84 per cent of its investment portfolio already lying in the HTM category. The bank has played a leadership role in spreading banking services in Karnataka making it an important banking centre.

Balaji Telefilms

Brics PCG Research, in its results highlights, recommends a 'hold' on Balaji Telefilms. The company reported revenues of Rs 70 crore in Q3 FY06, a rise of 35 per cent y-o-y.

Revenue contribution from commissioned programmes grew 35.4 per cent to Rs 57.7 crore in the same period, while sponsored programmes contributed Rs 9.3 crore, increasing 2 per cent.

Revenues for the first nine months of FY06 were up 43 per cent to Rs 200 crore, compared with Rs 140 crore in the same period last year. Commissioned programmes accounted for Rs 160 crore against Rs 120 crore in the previous corresponding period, a growth of 39.3 per cent.

Sponsored programmes chipped in Rs 27.3 crore of total revenues, a rise of 16.6 per cent. The average realisation per hour in case of commissioned programmes has increased to Rs 21.4 lakh in Q3 FY06, from Rs 17.3 lakh in Q3 FY05.