Asian Paints may see lower volume growth; Dabur sales likely to rise; Glenmark’s domestic biz should remain strong; Good margins for Patni; and strong net interest income growth for Union Bank

ASIAN PAINTS (Q2)

Net sales: Expected range Rs19.47 billion–Rs22.07 billion

Net profit: Expected range Rs2.16 billion–Rs 2.84 billion



Key aspects to look out for:

•    Volume growth is expected to be about 15% lower than the 24% in Q1 on account of the heavy monsoon.
•    Price rise in titanium dioxide, a key ingredient in the manufacture of paints, could put margins under pressure despite the about 7% hike in prices of paints.

DABUR INDIA (Q2)

Net sales: Expected range Rs9.78 billion–Rs10.18 billion

Net profit: Expected range Rs1.21billion–Rs1.73 billion



Some points to keep an eye on:

•    Given that 50% of the Dabur’s sales are in rural areas, the good monsoon may boost sales, although much of the benefit could come only in the December quarter.
•    Product price increase (about 3%) on hair oil will help keep margins steady.
•    International business is expected to grow more than 20%.
•    The food business should remain strong, while there could be some pressure on shampoos.

GLENMARK PHARMA (Q2)

Net sales: Expected range Rs6.30 billion–Rs7.14 billion

Net profit: Expected range Rs0.84 billion–Rs1.20 billion



Key points to look at:

•    Domestic business is expected to post strong growth.
•    Look out for how the company’s US and Latin American businesses are growing.  
•    At-risk launch of generic Tarka could contribute about Rs30 crore in the quarter.
•    High base and rupee appreciation may lead to margin contraction.
•    It received one-time income of $20 million in Q1.

PATNI COMPUTER (Q3)

Net sales: Expected range Rs7.98 billion–Rs9 billion

Net profit: Expected range Rs1.16 billion–Rs1.54 billion



Some key aspects to look for:

•    The dollar revenue is expected to be in line with guidance ($176 million-$177 million)
•    Other income may come down due to reduced cash after a special dividend payout.
•    Note the comments on the Universal American deal.
•    Margins may be strong since the company did not have wage hikes this quarter.

UNION BANK OF INDIA (Q2)

Net Interest Income: Expected range Rs13.48 billion–Rs14.40 billion

Net profit: Expected range Rs5.07 billion–Rs6.54 billion



Key points to watch:

•    Expected to show good net interest income growth on a low base.
•    Margins could expand, loan growth is expected to be strong.
•    Fee income could grow, but trading income could fall.
•    Asset quality is expected to slip.
•    Delinquencies and provisioning should be high this quarter. — Munira Dongre

(This report is based on secondary research and is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author’s own and may not necessarily represent those of Moneylife).