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�� Action
Based on what we have seen in the 3Q FY11 (the December quarter), earnings
season so far, we maintain our view that FY12F consensus earnings growth is too
optimistic and downgrades have further to go. We stick to our cautious view on the
market, despite the recent market declines.
Anchor themes
Cost pressures remain a key risk to earnings and market momentum. Although topline
growth has kept pace with inflation in nominal terms, pressure on bottom-lines
from rising raw material prices, wages and interest costs are intensifying across
sectors.
Some 72 out of the 109 companies in our coverage universe have declared 3Q
FY11 results so far. Ex oil & gas and banks, net sales are up 24.3%, EBITDA is up
9.8% and PAT is up 6.8% y-y.
Stocks for action
Our top BUY calls are M&M and Pantaloon Retail as consumption and rural demand plays and TATA Steel and CAIRN for their exposure to global commodity prices. Ambuja Cement and HPCL are our top REDUCE calls.
Visit http://indiaer.blogspot.com/ for complete details �� ��
�� Action
Based on what we have seen in the 3Q FY11 (the December quarter), earnings
season so far, we maintain our view that FY12F consensus earnings growth is too
optimistic and downgrades have further to go. We stick to our cautious view on the
market, despite the recent market declines.
Anchor themes
Cost pressures remain a key risk to earnings and market momentum. Although topline
growth has kept pace with inflation in nominal terms, pressure on bottom-lines
from rising raw material prices, wages and interest costs are intensifying across
sectors.
Some 72 out of the 109 companies in our coverage universe have declared 3Q
FY11 results so far. Ex oil & gas and banks, net sales are up 24.3%, EBITDA is up
9.8% and PAT is up 6.8% y-y.
Stocks for action
Our top BUY calls are M&M and Pantaloon Retail as consumption and rural demand plays and TATA Steel and CAIRN for their exposure to global commodity prices. Ambuja Cement and HPCL are our top REDUCE calls.