MOSL: INDIA STRATEGY-2QFY18 interim earnings review-Ex-OMCs, headline numbers in-line-Nifty EPS est. cut by 1.6% to INR 479

​India Strategy: 2QFY18 interim earnings review; Ex-OMCs, headline numbers in-line; Nifty EPS est. cut by 1.6% to INR 479

The 2QFY18 earnings season is well past the half-way stage, with 103 MOSL Universe and 34 Nifty companies having already released their results till November 2, 2017.

These companies comprise (a) 70% of estimated PAT for MOSL Universe and 72% of estimated PAT for Nifty, and (c) 50% of India's market cap.

Key takeaways

• Excluding IOC (the lone OMC that has declared 2QFY18 results so far), the 2QFY18 earnings season has been broadly in line with expectations on headline numbers. Of the 34 Nifty companies that have declared their results so far, 23 have reported earnings ahead of or in line with our estimates. The earnings upgrade/downgrade ratio is skewed in favor of downgrades, with 21 MOSL Universe companies seeing upgrades of 3% and 29 seeing downgrades of 3%.
  
• For MOSL Universe, sales, EBITDA and PAT have grown 11.6%, 11.6% and 7.4% YoY, as against expectations of 15.8%, 14.5% and 17.4%, respectively. Excluding OMCs, sales, EBITDA and PAT have grown 11.3%, 11.6% and 6.9% versus expectations of 12.7%, 10.9% and 9.2%, respectively. For MOSL Universe ex OMCs, PSU Banks and Metals, sales, EBITDA and PAT have grown 8.3%, 9.5% and 4% versus expectations of 10.6%, 7.6% and 4%, respectively.
  
• Sales, EBITDA and PAT for the 34 Nifty companies have grown 10.8%, 10.8% and 6.3% versus expectations of 16.3%, 15.1% and 18.8%, respectively. The divergence is owing to disappointing numbers from IOC and Axis Bank. For Nifty ex OMCs, sales, EBITDA and PAT grew 10.3%, 10.8% and 5.6% versus expectations of 12.4%, 10.7% and 8.9%, respectively.