Interim Results past half way mark: aggregates in line:: BofA ML

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Interim Results past half way mark: aggregates in line




�� On track – but margins still a worry
We are past the half-way mark on results and we have 3 broad points to make:
1. Aggregate numbers so far are in line with our estimates. The earnings story,
that growth will be strong but there won’t be any major surprises, is playing
out. Our aggregate estimates for the Sensex companies are practically
unchanged in the result season so far.
2. Breadth better: The broader universe has done slightly better than the
aggregates with more companies beating estimates than those disappointing.
3. However, the bad news is that margin worries still continue. Nearly 60% of
the companies showed a drop in margins.



Financials show strong growth as expected
Financials, as expected, saw the strongest growth while cement was the big
disappointment. Pharma was the other area of strength with Dr Reddys,
Glenmark, Biocon surprising. Within each sector there was a mixed trend too:
1. Autos: Big surprise from M&M; poor Hero Honda results
2. Industrials: BHEL surprised while ABB disappointed
3. Banks: Bank of Baroda surprised while Union Bank disappointed
4. Consumers: United Spirits, Asian Paints disappointed, Titan surprised



Major Surprises: Jaiprakash, Bank of Baroda, JSW Steel,
Mahindra & Mahindra, Dr Reddys
Major Disappointments: ACC, United Spirits, Union Bank,
Ambuja, Idea Cellular