Aggregate earnings growth for Sensex companies at 20% yoy was in line with expectations. The breadth was however disappointing. Sectorally, only IT services exceeded expectations.
Revenue growth was driven by cyclical sectors benefiting from a weak base effect, be it commodity prices for global sectors or weak volumes for local cyclicals.
EBITDA margins for the sample are up 1.9ppt. Ex-energy margins are up 3ppt. Margin expansion is happening in all sectors except for Healthcare and Telecoms.
With rising competition and input costs taking a toll, particularly for consumption related sectors. Health care and Telecom have clearly failed to meet the expectations. Consumer Staples, Consumer Discretionary, Financials, Industrials and Utilities have managed to meet the expectations.