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Our team had recently analysed around 500 businesses third quarter results and I have gone through roughly 60 -70 businesses which are on my watch list (not all are on wish list!). In this first part of mine blog I am sharing my opinion on 24 businesses of which 11 businesses have disappointed me with their third quarter results (46%).

But overall from my watchlist, I was disappointed by 32% of those businesses results and the bad part was that all these businesses are of good quality. One in three quality businesses had reported bad results and all of those results had reflected in the weak stock market performance in the past 6 months.

Bajaj Auto:

 This stock was in news of getting new ‘Quadricycle’ product. The third quarter results showed no growth in revenues from last quarter and for the same quarter last year a fall of -5%. If we look at the profits then they managed to grow by 8% against last quarter and 10% by last year same quarter.

The competition in this sector is fierce. Many others within this sector are facing negative growth at both the levels. What we like about Bajaj Auto is its growing business and acceptance in the overseas market.

Maruti Suzuki:

Like any other automobile business, this year not many businesses reported double digit growth in its revenue like Maruti Suzuki. The highlight in their reports was improvement in their profit margins.

Hero Motocorp:

Hero is gaining its footprint with exports in other markets from last two quarters and also gaining a momentum in the local market. Revenues have climbed 12% and that had also shown positive results in their EBIT.

Atul Auto:

A very small automobile business which is growing its revenues by almost 20% year on year basis and reaping growth in its Net Profits too.

Amar Raja Batteries:

Amar Raja is doing almost double digit growth in revenues and is performing well on its margin even though Automobile business have not shown any robust growth. Its earnings before tax and after exceptional margin was 16.45% and for the same quarter last year was 15.25%.

Bosch:

Bosch had a bad financial 2013 year. We have not witnessed any growth in revenues and also its profits before taxes margin has fallen down.

Swaraj Engines:

Another micro company that we like a lot. Revenues are growing and same time their profits are also growing in double digit. Also we like their organic growth which will bring more prosperity to its shareholder.

Axis Bank:

This quarter we have not witnessed any growth in its interest earnings but in the bottom line we had witnessed a growth of 17% quarter on quarter and 22% in same quarter last year in its profits before tax. Also we have seen a marginal uptick in its gross and net NPA’s.

HDFC Bank:

This was the first quarter where the net interest earnings did not grew by 30% compare to last year same quarter. Well, there is no alarm bell ringing at the moment but this deterioration tells us about the money market in India.

Jammu & Kashmir Bank:

One of our favourite bank which we feel is undervalued in the market. This business is enjoying a very healthy earnings and revenue growth.  

City Union Bank:

Another small bank with uptick in revenues and earnings and a good comeback from its previous quarter.

Indusind Bank:

Indusind bank is performing very well in this sector and giving a strong results every quarter this year. Also with low NPA’s it has been a flavour in the market and have been trading at expensive price to its peers.

Federal Bank:

Federal bank is been struggling to grow its NIM’s and is facing a pressure on its profitability. They did impressed us by bringing down their NPA’s. But still through our eyes we are not happy with its latest quarterly results.

Indian Bank:

NIM’s falling down and high NPA’s this year has not attracted many investors to this business including us.

Karur Vysya Bank:

Not at all impressive results they have reported this year. For example, they earned 992 Crore in last quarter in lending money to its customers and they paid interest of Rs 993 crore to its customers who deposited money in their bank. A loss of Rs 1 crore in its main stream business where same quarter last year they generated Rs 67 crore in profits.

Havells India:

Havell’s reported a decent 12% growth in its revenues and also healthy 33% growth in profits before taxes. An investment grade business which is trading at premium according to us.

IGL:

IGL has seen almost 20% growth in its revenues but has not seen that attractive uptick in its profits before tax. They say that revenues are all vanity and profits are all about sanity in the business. Well, we still feel they are trading at premium and lot of its revenues are getting chewed up by high gas prices.

Petronet LNG:

Petronet is also in the business of importing LNG and fluctuation of LNG pricing has chewed up all its profitability.

ONGC:

Importers of gas are not making big money because of the fluctuation but explorer or the producers of the gas are reaping benefits of it. ONGC has not witnessed any growth in its revenues but have seen a jump in its profits before tax by 29%.

Oil India:

Another oil drilling and exploration business but with totally different results compare to ONGC. Revenues for the third quarter jumped by 8% compare to same quarter last year and profits before tax have dropped by 2%.

Cairn India:

Cairn India reported almost 19% growth in its revenue compare to same quarter last year and a dip of 8% in profits before taxes.

GMDC:

Mining industry is already going through bad phase and GMDC reported a drop of 18% in its revenues and almost dropped 30% profits before taxes.

Cummins:

Cummins reported a 7% drop in its revenue and profits before exceptional income and taxes by 21% compare to quarter of last year.

Engineers India:

Engineers India had a shaky reporting year and its third quarter revenues dropped by almost 30% and profits before taxes grew by around 5%, thanks to the reduced cost on construction material for this quarter or else that 5% would have been wiped off.

We won’t take a long time to get back in touch with you all with our next post. There are lot of things to share with you all and this year will be no different to what it was last year. What I mean is it is not easy to make money in the equity market.

Your thoughts and opinions are all welcomed on the above businesses or any business that you have invested and have changed your thoughts on investments in them.