Earnings Wrap Q3FY15 ::ICICI Securities, report link

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Muted performance; recovery anticipated… • The just concluded earnings season (Q3FY15) saw more disappointments than positive surprises with most companies reporting a subdued performance. The management commentary, however, was neutral to positive, with most companies optimistic on a revival of the capex and investment cycle over the medium to long term, going forward. The Sensex (ex-banks & NBFCs) topline declined 3.0% YoY to | 470210 crore in Q3FY15. Sensex EBITDA in Q3FY15 was down sharply by 6.4% YoY to | 83281 crore with corresponding EBITDA margins at 17.7%, down 60 bps YoY. EBITDA margins came in muted despite companies benefiting from lower commodity prices (RM as a percentage of sales came in at 42.2% in Q3FY15 vis-à-vis 46.0% in Q3FY14) on account of negative operating leverage realised due to subdued sales (other expenses increased by 9.7% YoY). Sensex PAT in Q3FY15 was down 10.9% YoY to | 44339 crore. PAT de-growth was largely on account of fall in operating profit and rise in depreciation (up 9.6% YoY due to a change in Company’s Act) • In the banking space, all major banks expect HDFC & Axis bank witnessed asset quality stress with public sector banks reporting 19.6% growth in GNPA while the same for private sector banks stood at 26.4%. The PAT for most banks was, however, supported by higher other income due to fall in bond yields. In the oil & gas space, the performance was muted on account of subdued crude oil prices and more-than-expected inventory losses. • In the auto space, Q3FY15 witnessed a moderate recovery in volumes albeit on a low base partially boosted by ending of excise duty benefits. Overall volumes have grown ~4.7% YoY led by ~6.1% YoY growth in passenger vehicle and 5.5% YoY growth in commercial vehicles. Ex-oil & gas, the Sensex topline was up 4.0% YoY, EBITDA was down 1.5% YoY while PAT was down 1.5% YoY

LINK
http://content.icicidirect.com/mailimages/IDirect_EarningsWrap_Q3FY15.pdf