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  • Q1 FY19 results: What to expect

    Gradual progress

    Publish date: 10th July, 2018

    Auto & auto ancillary

    • What to expect: Strong growth in revenues and net profits (yoy)
    • Reasons for growth: Low base due to GST and strong demand
    • Top performers: Bajaj Auto (43%) and Ashok Leyland (49%)

    Building material

    • What to expect: The sector is likely to grow by 11% yoy
    • Reason for growth: Numbers are strong when compared to the GST-affected time period
    • Pain points: Rising gas prices; increased competition in tile segment; delay in implementation of e-way bill (likely to last 1-2 quarters)

    Capital goods and engineering

    • Current status: Getting new orders but capacity utilization remains low (71 to 74%); the power sector has remained muted
    • Reasons: The capital goods segment will remain subdued until next year’s general elections; the power sector will be impacted due to low supply of fuel or SEBI’s interest to sign long-term power purchase agreements
    • Outlook: We see attractive opportunities in select areas (read full report). Long-term performance is healthy too


    • What to expect: Universe coverage to grow by 23% yoy
    • Outlook: Cement volumes to rise due to accelerated housing and infrastructure construction; rural demand
    • Pain points: Cost pressure, caused by rising fuel price and pet coke, yet to be shifted to the consumer


    • What to expect: Revenues to go up (3.2%); margins to stay strong while net profits to remain stagnant
    • Outlook: Positive
    • Reasons: Improvement in margin, working capital cycle, rise in demand

    Consumer durables

    • What to expect: The AC industry is expected to show flat or negative growth this quarter
    • Reasons: Relatively low demand due to thunderstorms/dust storms in north India in April and May


    • What to expect: The sector is likely to see its earnings grow by 9.24% yoy; volume growth
    • Reasons: High earnings due to strong demand and healthy margin; volume growth due to uptick in rural demand and counting of the unorganized sector post-GST

    Information Technology

    • What to expect: Q1 is usually strong
    • Reasons: Rupee depreciation, digital growth and improving margins due to high demand


    • What to expect: Low double-digit growth in revenues
    • Reason: High port volumes (Adani Port and SEZ between 10 and 15%)

    Metals and mining

    • What to expect: Companies in ferrous space to report strong earnings; non-ferrous companies to remain muted
    • Reason: Ferrous companies benefit from rupee depreciation and high realization; non-ferrous companies experience headwinds due to rise in costs

    Oil and gas

    • What to expect: OIL India to have low realization because there may be a subsidy burden on PSU upstream companies; Refining margins to remain low due to fall in petrol and jet crakes; gas production to decline marginally


    • What to expect: Low double digit growth
    • Reasons: Government infrastructure work, improving income levels and launches in the auto sector

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