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India Strategy
Q3FY11: Downgrades begin
„Sensex profit surprises marginally; masks disappointment
The good news is that aggregate profit growth for the Sensex companies came in
slightly above estimates both on a stand-alone (17.9% growth) and consolidated
(23.3% growth) basis. However, the bad news is that the result seasons
disappointed with more than half the companies reporting numbers below analyst
expectations. The surprise was largely led by ONGC and Tata Motors. Secondly,
the surprise was due to lower tax with results being a minor disappointment at the
sales, EBITDA and PBT levels. Lastly, profit growth was again concentrated to
few companies with top-5 companies (Tata Motors, RIL, ONGC, ICICI and HDFC
Bank) accounting for ~75% of the growth.
Margin pressure continues
EBITDA margins for Sensex companies improved by 30bps on a YoY basis.
However, this improvement was led by Energy & Autos. Excluding Energy
EBITDA margins declined by 80bps largely led by falling margins in telecom,
utilities & industrials sector.
Sensex EPS: Downgrades have begun
Post 3Q results our Sensex EPS estimates has come down for FY11 (Rs1035
from Rs1050) and FY12 (Rs1265 from Rs1300). We expect our FY12 EPS growth
to see further downgrades to 15-16% EPS growth vs 22% currently
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Strategy
Q3FY11: Downgrades begin
„Sensex profit surprises marginally; masks disappointment
The good news is that aggregate profit growth for the Sensex companies came in
slightly above estimates both on a stand-alone (17.9% growth) and consolidated
(23.3% growth) basis. However, the bad news is that the result seasons
disappointed with more than half the companies reporting numbers below analyst
expectations. The surprise was largely led by ONGC and Tata Motors. Secondly,
the surprise was due to lower tax with results being a minor disappointment at the
sales, EBITDA and PBT levels. Lastly, profit growth was again concentrated to
few companies with top-5 companies (Tata Motors, RIL, ONGC, ICICI and HDFC
Bank) accounting for ~75% of the growth.
Margin pressure continues
EBITDA margins for Sensex companies improved by 30bps on a YoY basis.
However, this improvement was led by Energy & Autos. Excluding Energy
EBITDA margins declined by 80bps largely led by falling margins in telecom,
utilities & industrials sector.
Sensex EPS: Downgrades have begun
Post 3Q results our Sensex EPS estimates has come down for FY11 (Rs1035
from Rs1050) and FY12 (Rs1265 from Rs1300). We expect our FY12 EPS growth
to see further downgrades to 15-16% EPS growth vs 22% currently
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