Bajaj Auto: Dominant market share

ANALYSTS' CORNER

Enam Securities rates Bajaj Auto as an "outperformer". It declared revenues of Rs 1870 crore (28.9 per cent growth y-o-y), EBIDTA of Rs 320 crore (31.8 per cent y-o-y) and adjusted PAT of Rs 290 crore (48.2 per cent y-o-y) during Q2 FY06.

The market value of its investment portfolio stands at Rs 6500 crore. The company has a dominant market share in the lower and premium segments of the motorcycle market with its CT-100 and Pulsar brands.

However in the mid-segment, which accounts for around 50 per cent of the market, it has a low market share of around eight per cent.

Its brand, Discover is positioned in this segment and Bajaj expects to increase its market share following the recent launch of Discover upgrade. The company is also enhancing its motorcycle capacity to two lakh units per month by October.

This will help increase the production of Discover and meet the rising demand in other segments. Bajaj currently sells around 1.5 lakh motorcycles per month.

UTI Bank: Beating expectations

Angel Broking recommends a "buy" on UTI Bank. It has reported a robust growth in net profit for Q2 FY06. It has posted a growth of 135.9 per cent to Rs 109 crore from Rs 46 crore, beating expectations.

The strong growth was due to an accounting loss following transfer of a large portfolio of government bonds to the held-to-maturity category during Q2 FY05.

Excluding trading income, the bank maintained its steady growth momentum with core operating profit registering a growth of 26 per cent to Rs 167 crore. The growth in earnings was led by a strong growth in its core business, net interest income.

During the quarter, the same grew by 41.4 per cent to Rs 255 crore against the expectation of Rs 229 crore. This growth in earnings was led by a robust growth in the advances portfolio of the bank and sequential improvement in its interest margins contributed by low-cost deposits and retail assets.

During the quarter, non-interest income stood at Rs 178 crore driven by core fee income and also some significant contribution from trading income.

ICICI Bank: Growth in retail assets

CLSA Research rates ICICI Bank as an "outperformer". The bank's second quarter operating performance was in-line with expectations.

A 73 per cent growth in retail assets aided a 40 per cent growth in net interest income and fees were up 30 per cent. It also continues to witness strong asset quality upgrades and with gross NPLs falling 23 per cent q-o-q, net NPL levels are now just 0.97 per cent.

It has unveiled plans for a larger than expected $ 1.8 billion capital issuance (a 20 per cent dilution). Asset quality of the bank registered an improvement with gross NPL levels dropping 23 per cent q-o-q to Rs 4000 crore (post transfer of Dabhol assets to new sponsors) and restructured assets shrinking nine per cent to Rs 5200 crore.