Earnings Wrap 2Q FY 2012 ::ICICI Securities

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S l i d e   i n   E B I T D A   m a r g i n   c o n t i n u e s …
• The Q2FY12 performance of Sensex companies has been mixed.
On a QoQ basis, revenues rose by 4.5% but the decline in EBITDA
margin by 80 bps led to flattish EBITDA. Lower other income
(down by 35%) and higher interest expense (up by 9%) dented
the aggregate net profit, which declined by 9%. In spite of an
increase in the aggregate profitability of the oil & gas (up by 47%)
and capital goods sector (up by 41%), the overall net profit
declined owing to a decline in profitability of metals (down by
59%) and power sector (52%)
• The EBITDA margin has declined by 80 bps on a QoQ basis and
150 bps on a YoY basis. The QoQ decline in the EBITDA margin
was mainly on account of the increase in the other expense to
sales ratio by 120 bps. The metals and mining sector was the
major drag on the aggregate EBITDA margin as it reported a 690
bps decline on a QoQ basis.  This has negated the 410 bps
improvement in EBITDA margin of the oil & gas sector
• Of the sectors, the oil and gas sector recorded strong growth in
profitability owing to the low subsidy sharing burden on ONGC,
which enabled it to report robust growth in profitability. The
metals & mining and power sectors saw lower profitability owing
to lower EBITDA margin. Among other sectors, the capital goods
and IT sectors have delivered positive growth in profitability of
41% and 1%, respectively, while the auto sector delivered
negative growth of 5% in net profit