Earnings growth for Sensex companies was modest in Q4FY14 at 5.4% YoY. However, the significance of Q4 earnings has been completely overshadowed by the strong mandate received by the new government, said ICICIdirect. "There is hope the strong mandate shall revitalise domestic oriented sectors, including capital goods, power, real estate, infra, banks, etc."
The divergent performance between export & domestic oriented sectors continued as expected in Q4. IT and pharma registered healthy PAT growth of 36.7% YoY and 25.3% YoY, respectively, as expected. Dollar revenue growth (average of 1.8% QoQ) for IT companies was in line with estimate. For pharma, the major chunk of growth was contributed by the US market.
Results were mixed for the auto segment as volume growth was strong at 8% with the festival of Gudi Padwa falling in March this year vis-à-vis April last year. Results of Tata Motors were below estimates due to one-off interest expense and continued losses in the domestic business.''
''With respect to domestic oriented sectors, results were largely subdued as expected. Infra, real estate, capital goods and power continued to disappoint with sluggish volume growth, elevated interest cost, low availability of domestic gas, etc. However, sentiments have turned positive post the landslide victory for the NDA and dovish tone on interest rate on part of the RBI,'' it said.
''Some green shoots of recovery were visible in a few sectors including i) cement-On the back of peak season demand, sales volume were up 6.6% YoY to 36.5 MT. ii) consumer discretionary- topline growth of 17% YoY largely driven by healthy 12% volume growth iii) metals-despite muted demand scenario, domestic majors like Tata Steel, JSW Steel and SAIL delivered healthy volume growth of 5.7%, 8.8% and 9.4%, respectively, by augmenting their market share & improved product mix.''
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