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India Equity Research Reports, IPO and Stock News
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● 1Q12 results were disappointing: total sales in CS coverage beat
by 2% but op. profits missed by 3% (Fig 1). Misses came mainly
from Financials (SBI, BOI, Union Bank), Cap Goods (Crompton,
ABB, Areva) and Utilities (Lanco, JPVL, Tata Power). Profits
surprised positively only in Metals (HZL, CIL) and Autos (Maruti).
● At the EBITDA level, ex-Financials, ex-PSU Oil, 26 companies
beat operating profit estimates for 32 that missed, and 8 were inline (±2% assumed as in-line). Capital Goods and Utilities missed
most, while Metals and Autos dominated the beats (Fig 2).
● All sectors except Staples saw margins contract (Fig 3), as sales
growth outpaced profit growth – rate sensitive sectors in particular
(Financials, Utilities, Cons/Infra) saw sharp contraction. ExFin/PSU Oil, EBITDA growth was 14%, on 25% sales growth.
● Outlook seems to have worsened decisively across sectors: all
saw earnings downgrades (Fig 4), but in particular global sectors
and rate sensitive sectors. We believe cuts in ‘global’ earnings
can bring down index EPS integer growth to 8% in FY12 from the
current 16%; though they were so far untouched
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● 1Q12 results were disappointing: total sales in CS coverage beat
by 2% but op. profits missed by 3% (Fig 1). Misses came mainly
from Financials (SBI, BOI, Union Bank), Cap Goods (Crompton,
ABB, Areva) and Utilities (Lanco, JPVL, Tata Power). Profits
surprised positively only in Metals (HZL, CIL) and Autos (Maruti).
● At the EBITDA level, ex-Financials, ex-PSU Oil, 26 companies
beat operating profit estimates for 32 that missed, and 8 were inline (±2% assumed as in-line). Capital Goods and Utilities missed
most, while Metals and Autos dominated the beats (Fig 2).
● All sectors except Staples saw margins contract (Fig 3), as sales
growth outpaced profit growth – rate sensitive sectors in particular
(Financials, Utilities, Cons/Infra) saw sharp contraction. ExFin/PSU Oil, EBITDA growth was 14%, on 25% sales growth.
● Outlook seems to have worsened decisively across sectors: all
saw earnings downgrades (Fig 4), but in particular global sectors
and rate sensitive sectors. We believe cuts in ‘global’ earnings
can bring down index EPS integer growth to 8% in FY12 from the
current 16%; though they were so far untouched
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