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4QFY14 Review Summary

Core Content

This document provides a comprehensive review of the financial performance of several Indian companies during the fourth quarter of fiscal year 2014 (4QFY14) and highlights key financial metrics, performance trends, and analyst views for the full year (FY14) and future projections (FY15 and FY16). It includes analysis of DLF Ltd, Bharat Heavy Electricals (BHEL), Tata Motors (TTMT), PVR, Eros International, and other sectors such as Media, Capital Goods, and Telecom.

Key Highlights

DLF Ltd

• 4QFY14 Profit: INR2.4b vs. Rs0.5b YoY, as expected.
• Presales (FY14): INR42b, up 10% from FY13.
• Revenue (FY14): INR83b, up 8% YoY.
• Other Income: INR15b vs. INR5b last year, due to asset sales.
• Net Debt: Reduced by 18% YoY to INR160b.
• Debt/Equity (D/E): 0.5x vs. 0.6x YoY (lowest in six years).
• Full-year Recurring Profit (FY14): INR10b vs. INR3b, with a one-time loss reducing it to INR6.5b.
• Analyst View: Maintain BUY with target price (TP) of INR300. Expect a 60% earnings CAGR over FY15-17.

Bharat Heavy Electricals (BHEL)

• 4QFY14 Profit: INR18.4b, down 43% YoY, slightly above estimate.
• Orders (4QFY14): INR164b, down 21% YoY.
• Full-year Orders: Down 11% to INR280b.
• Orderbook: INR1tn, 2.4x FY14 revenue.
• Revenue (4QFY14): INR150b, down 22% YoY.
• EBITDA Margin: 18.2% vs. 24.2% last year.
• Analyst View: Maintain SELL view. Expect continued revenue and profit decline. Forecast FY15/16 profit to decline by 15% and 10% respectively.

Tata Motors (TTMT)

• 4QFY14 Revenue: INR653b, up 2% QoQ and 50% YoY.
• EBITDA: INR100b, up 1% QoQ and 91% YoY.
• FY14 Revenue: INR2328b, up 23% YoY.
• FY14 EBITDA: INR348b, up 42% YoY.
• FY14 EPS: INR43.3, up 40% YoY.
• Analyst View: Maintain BUY with TP of INR510. Expect strong performance from JLR and new launches in FY15.

PVR

• 4QFY14 EBITDA: INR331m, higher than forecast.
• Revenue: INR3.1b, up 32% YoY.
• EBITDA Margin: 10.5%, up 362bps YoY.
• Footfalls: 13.9m, up 30.3% YoY.
• Analyst View: Maintain BUY with TP of INR596. Expect strong growth in FY15 due to movie slate and market leadership.

Eros International

• 4QFY14 EPS: INR4.5, up 30% YoY, higher than forecast.
• Revenue: INR3.1b, up 48% YoY.
• EBITDA Margin: 23.4%, up 380bps YoY.
• Analyst View: Maintain BUY with TP of INR230. Expect strong FY15 performance with new movie slate and satellite rights sales.

Economic Outlook

• GDP Growth: Consensus expects 4QFY14 and FY14 GDP at 4.7%, down from 5% last year.
• Future Outlook: With the new BJP-led government, GDP growth is expected to rise to 5%+ in FY15 and gain further momentum in FY16.

Key Company Acquisitions and Strategic Moves

• Reliance Industries (RIL): Acquiring 78% stake in Network 18 and 9% stake in TV18 for INR40b.
• Objective: To enhance 4G services by integrating digital properties.

Analyst Views and Recommendations

Summary of Key Metrics

Revenue and EBITDA Growth

• DLF Ltd: FY14 revenue up 8%, EBITDA up 10%.
• TTMT: FY14 revenue up 23%, EBITDA up 42%.
• PVR: FY14 revenue up 32%, EBITDA up 42%.
• Eros International: FY14 revenue up 48%, EBITDA up 380bps.

Financial Health

• DLF Ltd: Net debt reduced by 18% YoY, D/E at 0.5x.
• TTMT: Net automotive debt/equity at 0.07%, indicating strong financial health.

Market Trends

• DLF Ltd: Expected demand recovery due to improved macroeconomic conditions.
• TTMT: Anticipates a sharp turnaround in truck demand in 2HFY15.
• PVR: Confident in rebranding Cinemax and increasing market share.
• Eros International: Strong performance from movie slate and satellite rights sales.

Conclusion

The 4QFY14 performance of the analyzed companies reflects a mix of growth and challenges. While some companies like DLF Ltd, TTMT, and PVR show positive trends and strong analyst confidence, others like BHEL face declining earnings and a cautious outlook. The overall economic environment is expected to improve, supporting recovery in key sectors such as property and capital goods. Analysts suggest that the market is still in a phase of adjustment, but long-term growth potential remains intact for companies with strong fundamentals and strategic initiatives.