Analysts' corner: Jet Airways

Enam Securities, in its results update, rates Jet Airways "neutral", relative to the sector. The report states that the company's performance was largely affected by lower load factors and a high operating cost environment.

It reported a 22 per cent y-o-y growth in Q3 FY06 revenues to Rs 1,480 crore from Rs 1,200 crore in Q3 FY04.

While EBITDA margin declined by 1000 bps to 24.3 per cent, EBITDA margin declined 1360 bps to 16.3 per cent. The change in the domestic passenger booking profile in terms of full fare vs discount fare, has moved in favour of the latter from a ratio of 70:30 to 50:50 during the last four months.

On the contrary, the gross passenger yield improved by 5.5 per cent to Rs 6.65 per km on domestic operations.

Despite adequate yield management, the intensity of domestic competition has impacted the load factors leading to decline of 370 bps to 72.5 per cent. Similarly on international route the load factor declined by 180 bps to 62.4 per cent, due to new introductory routes.

Munjal Auto Industries

HDFC Securities, in its report on Munjal Auto Industries, states that the company has over the past few years, steadily created large manufacturing facilities with world-class process capabilities and has run it most efficiently, which ranks it ahead of its competition.

This Hero Group company, manufactures sheet metal components and forging/gear components. It derives about 64 per cent of its revenues from sheet metal components and the rest from the forging/machining division. Almost 99 per cent of its revenues are derived from Hero Honda Motor.

It has installed up to date stamping line, having process capabilities for dies, blanking and bending.

Its facilities incorporate state-of-the-art cross-shaft stamping presses to cater to the vast range of stamping operations and also have its own die design, heat-treating, prototype development, painting and powder coating facilities.

Bharat Forge

Enam Securities, in its results update on Bharat Forge, states that despite slowdown in the commercial vehicle industry, which accounts for about 42 per cent of the company's sales, market share gain across the segments aided growth.

The company has declared revenues of Rs 400 crore (28.5 per cent growth y-o-y), EBIDTA of Rs 98.6 crore and adjusted PAT of Rs 53.3 crore Q3 FY06. Sales growth owed to robust domestic sales.

Exports were up marginally by 6.5 per cent, contributing about 40 per cent of net sales owing to slowdown in China and delay in launches from global OEM's.

Consolidated margins were impacted owing to recent acquisitions of BF Kilsta and BF America.

However, it is believed that these will start contributing positively to the margins and profits over the next few quarters. The company has recently signed a JV with FAW Corporation for its forging business.