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3QFY11 Results Preview
Sectors (click of sector for details)
Automobiles
Cement
Financials
FMCG & Retail
Industrials
Information Technology
Media
Metals
Oil & Gas
Pharmaceuticals
Real Estate
Shipping
Sugar
Utilities & Infrastructure
Miscellaneous
Growth story intact… with the possibilities of hiccups….
As India Inc. soon slips into its results season, the expectations are quite high given the robustness of the 2QFY11 numbers. While a majority of market participants have tempered their
expectations, estimates of companies under Antique’s coverage (ex-financials) convey a YoY and a QoQ revenue growth of 27% and 7%, respectively. Excluding the oil sector, we
estimate revenues to grow 20 % YoY and 4% QoQ, respectively. On the EBIDTA front for these companies (ex-financials), the picture would be a bit mixed as there would be a YoY growth
of 12%, but on a QoQ basis there would be a slide of 9%. If one were to exclude oil and gas, then these figures would exhibit a growth of 15% and 8% on a YoY and QoQ basis
respectively. Thus the inference is that revenues and earnings traction, if one excludes commodities, continues to be satisfactory, albeit with a squeeze on margins.
Results overview
The financial services sector is expected to report revenue growth of 27% YoY and 2% QoQ and a net profit growth of 19% YoY and 10% QoQ, respectively. This corroborates the growth
in other sectors as well. The leaders on the revenues growth front would be Media, Sugar and real estate on a YoY basis and Media, Oil and Gas and cement on a QoQ basis. On the
Ebidta front, the strongest YoY growth is expected from Media, Real estate, FMCG/retail and Auto with sectors like Cement, Sugar, Media and Metals leading the pack on a QoQ basis.
On the net profits front, we expect sectors like Cement, Media and Sugar to register the strongest traction on a QoQ basis, while sectors like Auto, Media and real estate would shine on
a YoY basis.
The leaders in OPM growth would be real estate, shipping and media on a YoY basis while
it would be sugar, media and metals on a QoQ basis. The league standings would be
altered if one views absolute figures on the Ebidta front, as the strongest growth on a YoY
basis is expected from Media, Real estate, FMCG/retail and Auto while on a QoQ basis it
would be from Cement, Sugar, Media and Metals.
The OPM of companies under our coverage (ex financials and oild & gas) would be ~15%,
a dip of 113bps YoY and 278 on a QoQ basis. This conveys that the margins are under
pressure, and have been countered only by improvement in scale. Net profit margins are
expected to be ~8% ( down 113bps on a YoY basis and 278 bps on a QoQ basis).
The Oil and Gas sector would exhibit an OPM of 8.5%, (down 120bps on a YoY basis and
650 bps on a QoQ basis) conveying that rising crude prices can still be a major spoilsport.
Summing up, we can say that the revenues and EBITDA growth trend is largely intact,
though a bit sedate. While the upsurge in the heavy weight oil and gas sector boosted
growth few quarters back, a slowdown in the same would bog down the overall growth. As
the markets have begun taking cognizance of next fiscal numbers, the tempered expectations
of the same could ensure that we are in for a round staid movement in the markets.
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