Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Results ring warning bells
Fri, 29 Oct Pre-Open

We are half way through the earnings season and it has given reasons to cheer. Overall India Inc has doled out a commendable performance. However, there are a few reasons to worry.

On a year on year basis, revenues have grown for nearly all the sectors. Auto stocks have stolen the limelight on the back of very strong sales numbers that were driven by strong volumes. The companies were able to maintain high margins and this translated into a strong growth in profits as well. Other sectors that have done well were steel and banking & financials.

The surprise during the quarter was from the erstwhile laggard - the textile sector. The sector has been witnessing a turnaround in demand, which is clearly visible in their strong growth in sales as well as in their profits.

Stocks in the IT sector have given a mixed performance. While strong growth was seen in the IT majors TCS and Infosys, weak performance was delivered by their peers Wipro and HCL Technologies. Recovery in demand has driven growth in volumes for the IT companies during the quarter. However, cost increases for Wipro and HCL Technologies have dragged down their profit numbers.

All was not well for FMCG and Cement stocks either. While both sectors have witnessed a robust growth in revenues, higher costs have prevented this growth from transpiring in the bottom line. The FMCG sector was plagued by higher raw material costs as well as higher marketing spend. While companies have raised prices across their major product categories, the positive impact of this in the profits still remains to be seen. Cement companies have had another quarter of troubles owing to issues related to over supply as well as logistics. As a result, profits have actually declined on a YoY basis.

  Revenue Growth PAT Growth
Auto 55% 61%
Steel 31% 21%
Financials 27% 28%
Textiles 25% 74%
Banking 21% 22%
IT 20% 13%
Power 19% 6%
Pharmaceuticals 16% 13%
Cement 14% -66%
Engineering 14% 10%
FMCG 12% -3%
Energy 10% 78%

Retail investors need to be careful while picking stocks at this point of time. They need to be cautious of big sales numbers as they may or may not translate to higher income for the companies. However, a careful and disciplined investment approach can help the investors in maximizing their gains.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Results ring warning bells". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.