Q2 result previews: Titan, Cipla, GAIL, Britannia, Marico & IndiGo

Dozens of companies will report their September quarter earnings today. Among them are Titan Company, Cipla, Britannia Industries, Marico, GAIL and InterGlobe Aviation (IndiGo). Titan Company and Britannia Industries are seen clocking double-digit growth in Q2 profits. Cipla and Marico may report low single-digit growth in profit; GAIL may log a de-growth in profit while IndiGo may log losses for the quarter, analyst estimates suggest.

Titan Company: ICICIdirect expects Titan to report a 19.3 per cent YoY rise in net pofit at Rs 764.90 crore for September quarter on 17.4 per cent YoY rise in sales at Rs 8,800.40 crore. The brokearge expects gross margins to improve 150 bps YoY to 26.5 per cent as studded sales were higher than the overall division, driven by good activations and better contribution from high value purchases. That said,   higher employee and marketing expenses may restrict Ebitda margin expansion. ICICIdirect sees Ebitda margin flattish YoY at 12.9 per cent. Post Titan's Q2 business update, Emkay pegged profit figure at Rs 776 crore and sales figure at Rs 8,851.80 crore.

Cipla: Elara Securities expects Cipla to report a 4 per cent YoY rise in net profit at Rs 740 crore on a 5.2 per cent YoY rise in sales at Rs 5,808.30 crore. Ebitda is seen flattish at Rs 1,219.70 crore.

Motilal Oswal estimated Cipla's US sales at $170 million, up 20 per cent YoY, driven by new launches and market share gains in Albuterol/Lenalidomide. The anti-infectives segment will be the key drag on growth, it said. Motilal expects domestic formulation sales to grow moderately at 5 per cent YoY. This brokerage sees profit rising 9.7 per cent YoY to Rs 780.70 crore on a 3.2 per cent rise in sales at Rs 5697.90 crore. All eyes would be on any update on niche pipeline including Peptide assets, inhalation assets, gAbraxane and gRevlimid.

Britannia Industries: HDFC Institutional Equities is modelling in a 14 per cent YoY revenue growth with volume growth of 4 per cent YoY. It is expecting a 151 basis points YoY decline in gross margin while it sees Ebitda  margin contraction of 69 basis YoY to 14.8 per cent. Ebitda may rise  9 per cent YoY, the brokerage said adding that any management commentary on  downtrading trends, new and on  completion of the plant will be keenly followed. The brokerage expects the FMCG firm to report a 13.8 per cent YoY rise in profit at Rs 430 crore on a 14.2 per cent YoY rise in sales at Rs 4,120 crore.

Marico: Kotak Institutional Equities sees Marico logging a 4.7 per cent YoY rise in profit at Rs 323.40 crore on a 4 per cent rise in sales at Rs 2,514.60 crore. Ebitda is seen rising 5.6 per cent to 446.5 crore while Ebitda margin is seen improving 26 basis points YoY to 17.8 per cent.  "Our forecast is in line with Marico's quarter end business update. We model 1.8 per cent YoY growth in the domestic FMCG business on the back of low single-digit growth in volumes. For the international business we model about 14 per cent YoY growth," it said.

Kotak said consolidated Ebitda margin will fall sequentially dragged down by currency headwinds in international subsidiaries, proactive price reductions in Saffola edible oils, and increase in A&P spends.  "We estimate 160 bps yoy gross margin improvement led by benign copra prices; 100 bps qoq decline in GM is attributable to consecutive price cuts in edible oils even as it consumes high-cost inventory," it said.

GAIL: Emkay Global sees profit for GAIl falling 33.2 per cent YoY to Rs 1,912.20 crore compared with Rs 2,863 crore in the year-ago quarter. This is even as sales is seen soaring 113.9 per cent YoY to Rs 46,005.90 crore from Rs 21,511 crore YoY. Ebitda is seen falling 26.7 per cent YoY to Rs 2,546.40 crore while margin is seen contracting sharply by 1062 basis points to 5.5 per cent from 16.2 per cent YoY.

"We expect transmission/marketing volumes to decline by 6 per cent/5 per cent QoQ; gas marketing margin may  fall 29 per cent QoQ, and see Petchem utilisation at 55 per cent. LPG realisation is likely to be down 21 per cent QoQ to $657 per mt," EMkay Global said in a preview note.

InterGlobe Aviation (IndiGo): Prabhudas Lilladher expects IndiGo to report a narrowing of losses at Rs 1,195.70 crore in September quarter compared with Rs 1,440 crore in the year-ago quarter. Losses may rise over June quarter's Rs 1,064.20 crore loss. Sales are seen surging 122 per cent to Rs 12,457.20 crore from Rs 5,608.50 crore YoY. Ebitda margin is seen falling to 4.4 per cent from 4.5 per cent YoY.

The brokerage expects IndiGo  to report a 3 per cent QoQ decline in sales, led by a seasonal weak quarter, lower yields and load factor. Margin s expected to be under pressure owing to higher ATF prices and INR depreciation causing forex MTM losses.

"We believe IndiGo will benefit in medium to long term from demand recovery along with capacity deployment, network expansions, commodity softening and better than industry cost structure. However, inflationary cost environment and rupee depreciation will continue to be a drag on profitability," it said.

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