Dalal Street Investments

India Earnings Season So Far – Mixed Bucket

February 1, 2010

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.


Got something to say?