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Friday, April 6, 2007
India Strategy
QE Mar-07 Earnings
Preview: Another StrongQuarter Expected
Quick Comment: The aggregation of our analysts’ earnings estimates for the QE March 2007 reveals a 32% YoY growth expectation in net earnings for Morgan Stanley’s coverage universe excluding the energy sector. Our analysts expect the energy sector to report a 33% decline in earnings (related to government bonds issued in F2006). Including the energy sector, our coverage universe is forecast to report growth of 4% in net profits for the QE March 2007. Given that our analysts’ estimates for earnings growth in F2007 are lower than the street’s (by 3.6%), we deduce that consensus expectations for the quarter are slightly higher.
What’s New: The net profit growth estimate is driven by a robust 24% growth in revenues (ex-energy), a 105bps rise in EBITDA margin and some contribution from non-operating items such as other income. The rise in EBITDA margin (ex-energy) is being supported by stellar performance from the healthcare, materials and telecoms sectors which are neutralizing the likely margin fall in consumer staples & discretionary and financials. As mentioned above, energy companies (excluding GAIL, Reliance and ONGC) are expected to report a steep fall in EBITDA margins. Excluding the financials and energy, EBITDA margins are expected to rise a whopping 204 bps YoY The sectors that are witnessing an acceleration in profit growth QoQ include financials and healthcare, whereas industrials and materials seem set to report a deceleration in growth.
Download full report Here
QE Mar-07 Earnings
Preview: Another StrongQuarter Expected
Quick Comment: The aggregation of our analysts’ earnings estimates for the QE March 2007 reveals a 32% YoY growth expectation in net earnings for Morgan Stanley’s coverage universe excluding the energy sector. Our analysts expect the energy sector to report a 33% decline in earnings (related to government bonds issued in F2006). Including the energy sector, our coverage universe is forecast to report growth of 4% in net profits for the QE March 2007. Given that our analysts’ estimates for earnings growth in F2007 are lower than the street’s (by 3.6%), we deduce that consensus expectations for the quarter are slightly higher.
What’s New: The net profit growth estimate is driven by a robust 24% growth in revenues (ex-energy), a 105bps rise in EBITDA margin and some contribution from non-operating items such as other income. The rise in EBITDA margin (ex-energy) is being supported by stellar performance from the healthcare, materials and telecoms sectors which are neutralizing the likely margin fall in consumer staples & discretionary and financials. As mentioned above, energy companies (excluding GAIL, Reliance and ONGC) are expected to report a steep fall in EBITDA margins. Excluding the financials and energy, EBITDA margins are expected to rise a whopping 204 bps YoY The sectors that are witnessing an acceleration in profit growth QoQ include financials and healthcare, whereas industrials and materials seem set to report a deceleration in growth.
Download full report Here
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IMPORTANT DISCLAIMER
Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.
