L&T unit buys Malaysian Henikwon Corp for undisclosed sum

L&T's Malaysia unit bought electrical equipment maker Henikwon Corp, the leading manufacturer of low and medium voltage busduct systems in that country

New Delhi" Engineering company Larsen & Toubro Ltd (L&T) said its unit bought Malaysia-based electrical equipment maker Henikwon Corporation for an undisclosed sum, reports PTI.

The acquisition was made by L&T's wholly-owned subsidiary Tamco Switchgear, a part of the engineering major's electrical and automation (E&A) business, the company said in a statement. Tamco is also head-quarterd in Malaysia.

"Based in Malaysia, Henikwon Corporation is a leading manufacturer of low and medium voltage busduct systems. The Henikwon acquisition brings a string of customer base of large corporations to Tamco," L&T said.

Busduct is a cost effective means of providing power and replaces the conventional cabling system.

The product range of Henikwon Corporation, incorporated in 1982, comprises light voltage sandwich busduct systems form 440 Amp to 6,300 Amp and medium voltage busduct systems for ratings from 400 Amp to 5,000 Amp.

"The acquisition will be complimentary to E&A's portfolio and make comprehensive offerings for the building and infrastructure systems," Tamco's Chairman SC Bhargava said.

"It will further enhance our presence in South East Asia and in catering to Indian and Middle East markets," he added.


Indus Ind Bank’s Q1 net profit rises by 31% to Rs236.26 crore

However, despite an increase in net profit, net interest margin and capital adequacy ratio— two key metrics declined

IndusInd Bank saw its net profit rise 31% year-on-year (y-o-y) for the three-months ended 30 June 2012. It went up from Rs180.18 crore to Rs236.26 crore. However, its net interest margin (NIM), a profitability indicator of banks, for the current quarter dipped to 3.22% when compared to 3.41% in the corresponding period last year. This is due to decline in bank's current account-savings account (CASA) ratio for Q1FY13 which stood at 27.86%, as against 28.20% in Q1FY12. What is of concern is its capital adequacy ratio (CAR), which has gone down to steeply by 2.13 percentage points, y-o-y, to 12.86%. The worsening economic environment and a high interest rate regime seem to have worsened the key metrics.

Despite the worsening CAR, IndusInd Bank's revenue performance was in line with its historical three-quarter y-o-y growth rates. Its revenue grew 41% whereas its three-quarter y-o-y sales growth was 45%. Its valuation seems to be tad on the higher end, with its market capitalisation almost 10 times its operating earnings, considering the current situation of the banking industry which seems dependent on the economy. Its operating profit figures showed healthy sign despite a decrease in NIM. Its operating profit grew 30% which is higher than its three-quarter y-o-y growth rates (26%). The bank has a decent annualised return on equity of 18%.

If the above numbers are an indication, it would seem that even though the bank's CAR and NIM has declined, it has not reported reduced revenue and profit figures. Even its gross non-performing assets (GNPA), which stood at Rs365.12 crore, dropped to 0.97% from 1.08% (Rs. 309.28 crore) for the corresponding period last year. Net Interest Income (NII) grew to Rs484.10 crore as compared to Rs390.01 crore during the corresponding period last year, a growth of 24%. This shows the bank's resilience.

Commenting on the performance, Romesh Sobti, managing director & CEO, IndusInd Bank said, "The bank has coped well in a deteriorating operating environment to deliver a healthy growth in the bottomline and balance sheet while maintaining the quality of the loan book."

IndusInd business of lending and accepting deposits grew. Total advances as on 30 June 2012 were at Rs37,244.49 crore as compared to Rs28,384.35 crore in the corresponding quarter of the previous year, recording a growth of 31%. Total deposits were at Rs45,075.86 crore as compared to Rs35,264.06 crore in the corresponding quarter of the previous year, up by 28%.

The bank saw an increase in its network to 421 branches, and 735 ATMs from 326 branches and 633 ATMs from last year. The bank also has two representative offices, one each in London and Dubai. IndusInd Bank, which commenced its operations in 1994, caters to the needs of both consumer and corporate customers.


Banks net to plunge 11% in Q1, says StanChart

Though private sector banks remain better placed in terms of overall asset quality, they too will see stress on their assets

Mumbai: Led by state-run banks which are set to report increased strains on asset quality, the banking sector is set to see profits decline by 11% during first quarter sequentially but a 43% spike in the same on an annualised basis, says StanChart Securities, according to a PTI report.

The state-run banks will see increased strains on their asset quality and more loan recasts pulling down their first quarter profit by 14% quarter on quarter (qoq), though there will a full 53% spike in post-tax profit on an annualised basis, says StanChart in a research note.

With a comparatively better show by the private sector banks, the report says overall earnings for banks will see a likely decline of 11% quarter on quarter (qoq) but an annualised growth of 43%.

The report further says though private sector banks remain better placed in terms of overall asset quality, they too will see stress on their assets with the overall profit declining by 5% QoQ and a growth of 30% year on year (yoy).

"We expect net profit for state banks to grow 53% year-on-year (primarily due to the low base effect for SBI) and decline 14% quarter on quarter in the first quarter of the fiscal."

"We expect net profit for private banks to grow 30% YoY and decline 5% qoq. Overall earnings for banks will likely grow 43% YoY and decline 11% qoq," the report titled 'India Financial-Q1FY13-Stress loans in focus again' prepared by Mahrukh Adajania and Rounak Agarwal of StanChart Securities said.

The report attributes poor number to flat loan growth, sharp growth in overseas loans due to rupee fall, high trading gains and/or write-back of investment depreciation due to volatility in G-secs and corporate bond yields, pressure on core fee income due to weak corporate activity, lower quarterly net interest margins due to high cost of deposits but no material dip and lower tax rates.

On the asset quality side, the report says, "the asset quality will remain mixed. Private banks will likely continue to show stable slippages and restructuring but the state-run banks will be a mixed bag."

There is a high probability that State Bank of India will show lower than guided slippages, the report says, adding so will Punjab National Bank and Bank of Baroda which are also likely to show qoq improvement in slippages but fresh restructuring.

However, due to the large exposure to SMEs both Allahabad Bank and Union Bank are likely see higher slippages and/or fresh loan restructuring, says the report, adding the same remains high for Bank of India as well.

On the trading front, the report says all the private banks are likely to show strong earnings and asset quality and hence the brokerage sees strong trading gains on Axis Bank due to the Max sale, followed by HDFC Bank and ICICI Bank.

From the state-run packs include PNB. On BoB it warned that the change of guard will remain a key overhang for the city-based lender.


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