1. Colgate: EPS jump of 40%!! From Rs 5.3 in 1Q09 to Rs 7.5 in 1Q10. Ad and other expenses have come down, while Colgate hasn't cut prices (I recall reading they actually increased them during the qtr). If investors annualize this, it is Rs 30 EPS for FY10 vs consensus at Rs 25. Stock at Rs 645 is 21x. Suddenly it ain't so expensive anymore (this is India)!! Nestle is at 28x, and right now Colgate has the highest EPS growth amongst all.
Question is - how long can margins expand?
2. SKF India - Sales down 15% yoy while EBIT is down close to 50%. Even when commodity prices have cooled off. Is it mainly because of the trading biz - importing heavy bearings into India and selling it here - which might have been hurt very badly by rupee depreciation. After all auto has recovered. Or is it that while auto is important, overall industrial growth is more important for this company. Company doesn't talk and analysts dont cover it - so this is all guess work.
3. VST: EPS has gone up 250% yoy - but a better way to look at it is probably sequentially this time around. What has happened to this company in the last year is actually quite amazing. This is the 3rd largest cigarette company in India. In 1Q09, its biz collapsed as Indian govt increased the excise duty on non-filter cigarettes by 2x-5x. VST had a high share of volume from non-filter segment. Suddenly the company found itself without a biz. So it did a very smart thing. It launched the same cigarettes in filter category - at a higher price. I guess its customers came back. So suddenly, its profits have zoomed up and have been going up every qtr for the past 4 qtrs - much much higher than under the old tax regime. At least that is my guess - no analyst covers this stock, and the company doesn't talk.
Right now, it is trading at 6x-7x PE. The company pays out most of its earnings as dividends. Disclosure: Bought stock today. This is high risk as the stock has always been cheap. I am betting some people will get attracted by a 10-15% dividend yield next yr.
4. India Infoline: Brokerages are minting money - no surprise there. QoQ profits have doubled. But stock is at Rs 132. Annualizing 1st qtr, we get Rs 6 EPS. 22x PE for a broker is a bit too much - even if they dont have any balance sheet risk and they exist in this great country with a wonderful future called India.