Changing Estimates of SENSEX Earnings – Trust Research
August 25, 2009
Since the beginning of the Year, BSE Sensex companies earnings [hence forth will be referred to as earnings] estimates has undergone a dramatic change with the SENSEX rising as well.
At the beginning, the consensus was earnings would take a dip in FY 2010. However, the tone of Analysts at various Brokerages and Research house started changing and we shall have a look at it and where it stands currently.
All Numbers below are INR Earnings for BSE 30 SENSEX Companies:
26/3/09 UBS 848 FY10 and 1023 FY11
17/04/09 Consensus 835 FY10
29/04/09 Morgan Stanley – Base Case 736 FY2010 [Extremely bearish View]
Consensus – 837 FY10 and 984 FY11
18/05/2009 – Elections Results are Out – Morgan Stanley Base Case jumps 851 FY10 and 957 FY11. Consensus 845 and 995 for FY10 and FY11
1/06/09 – Consensus 852 and 1005 for FY10 and FY11
10/07/2009 – Morgan Stanly changes its views and tone in the report – A new Bull Market
Deutsche Bank 824 / FY10 and 998 / FY11
15/07/2009 – BoFA Merrill Lynch – Still very conservative in earnings – 838 and 1023
20/07/2009 – Consensus 899 and 1068 for FY10 and FY11
Morgan Stanly a Big Bull and runs ahead of consensus in base case estimates – 904 and 1062 for FY10 and FY11
HSBC – 990 / FY11 [ Conservative Again]
05/08/2009 – Consensus 946 and 1119 for FY10 and FY11
Morgan Stanley – 974 / Fy10 and 1169 / FY11 – Running ahead of consensus even as Government comes openly about Drought.
BNP Pribas – 969 / FY 10
13/08/2009 – Nomura with Extremely Bullish prediction which is impossible to achieve – 1150 / FY10.
Update on 24/09/2009:
Kotak has set EPS estimates at Rs946 for FY2010E and Rs1,153 for FY2011E
Unfortunately, Morgan Stanley SENSEX EPS estimates has the highest variation and why this matters is their are over 1,000 FIIs operating in India and hardly few of them have in-house Research for India. They all rely on Morgan, Goldman etc and hence as Morgan Stanley keeps revising, it becomes a big mover of Indian markets. But you can witness Morgan’s Research and we don’t have to say anything about it
We have BoFA-Merrill Lynch still very conservative while Nomura extremely Bullish – two views at far end of spectrum. So go with Consensus estimates for arriving at BSE SENSEX Targets. Mean is 16 P/E 12 months forward for SENSEX.