Q1FY2007 earnings review: Sharekhan Special dated August 07, 2006

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Sunil

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Aug 9, 2006, 10:23:16 PM8/9/06
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Sharekhan Special
[August 07, 2006] Please see the attachment for details
Summary of Contents

SHAREKHAN SPECIAL

Q1FY2007 earnings review

  • The earnings of the Sensex companies for Q1FY2007 grew by 22.8% year on year (yoy) and 6.6% quarter on quarter (qoq) compared with the consensus expectations of 19.1% and 3.7% growth respectively.
  • While the sales of the non-banking companies in the Sensex grew by 33.4% yoy, their operating profit grew by a slower 31.3% as their operating profit margin (OPM) contracted by 42 basis points yoy to 26.2%.
  • Automobile, capital goods, cement, and information and technology (IT) companies led the growth in the Sensex' earnings.
  • The earnings of the Mid-cap 200 Index grew by 40% yoy. While the sales of the non-banking companies grew by 20% yoy, their operating profit grew by a faster 29% as their OPM expanded by 103 basis points. Cement companies like Shree Cement and India Cements led the expansion in the OPM.
  • The earnings of the Sensex companies are slated to grow by 21% for FY2007, implying an earnings growth of 20% yoy for M9FY2007.
  • At the current level of 10,811, the Sensex is trading at 14.4x its one-year forward earnings.
Regards,
The Sharekhan Research Team
myac...@sharekhan.com

Sharekhan Special 070806.pdf
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