EUR 350.00 For Business Accounts Only

MOSL: India Strategy - Result review 4QFY19-Financials drive performance; Consumption drags

India Strategy - Result review 4QFY19; Financials drive performance; Consumption drags

 

Nifty EPS stable; Broader universe see more downgrades than upgrades

• The 4QFY19 corporate earnings-report season was in line with our expectations for both the Nifty and the MOFSL Universe. Domestic Cyclicals continued driving earnings growth for the second consecutive quarter, led by Financials, which contributed almost the entire earnings delta but still fell short of expectations.
• Sales/EBITDA/profit growth for the Nifty came in at 10.2%/6.1%/15.8% v/s expectations of 11.1%/3.4%/16.8%. For the MOFSL Universe, sales/EBITDA/profit growth stood at 10.6%/7.3%/23.6% v/s expectations of 11.5%/5.1%/29.4%.
• Sales growth for the MOFSL Universe was the slowest since Dec'16, dragged by Commodities like Metals and O&G. EBITDA growth stood in-line at 7%. Notably, the EBITDA margin for the MOFSL (ex-Financials & OMCs) Universe shrank by 100bp to 19.1%, dragged by Automobiles, Consumer, Metals, O&G and Telecom. On the other hand, Cement and Utilities delivered YoY expansion in the operating margin.
• Corporate Banks continued reporting an improvement in the slippage/asset quality trends.