4QFY09 Results by Sector – A Positive Surprise

Indian Industry beat Street Expectations in 4QFY09 Results. It’s still early days in India’s earnings season, but the first trends suggest earnings are in-line with modest expectations +2.3% vs. 3.3% est. for the Sensex (10/30).

So far, Banks, Capital Goods, Household Consumer Products, Metals and Telecom have beat expectations. Auto & Components, Retailing and Utilities have been the laggards.

Margins are up almost 130bps yoy and qoq, and meaningfully ahead of expectations suggesting fairly obvious commodity and input price gains, but most likely pretty effective cost management by businesses still early days, but this is fairly impressive stuff.

A wider sample of 100 companies (BSE500) suggests a more positive bias. Profits are up 6%yoy and 12%qoq while sales growth is flat sequentially. Pertinently, over 2/3Q09, the wider set was consistently weaker than narrow Sensex companies, possibly suggesting greater stress at the top end than the broader market? Let’s wait for more of the earnings season.