These Companies May Deliver The Best And Worst Margin Performance In FY19
Nearly half of the widely tracked companies listed on Indian bourses are expected to report an expansion in their operating margin for the year ended March 2019, according to Bloomberg data.
As many as 80 of the 163 companies tracked by at least 15 analysts—excluding those from the banking, financial services and insurance sector—are expected to report higher Ebidta margins for the fiscal.
Based on analysts' earnings estimates here’s the list of companies expected to see the biggest jump and contraction in margin:
- Coal India: Ebitda margin of the world’s largest coal miner is expected to hit a three-year high, benefiting from price hikes and strict cost controls despite inflationary pressures. The company incurred a one-time non-recurring employee expense due to increase in gratuity ceiling in FY18, impacting its margins.
- Godrej Properties: The high margin sales of residential property will aid financials due to the implementation of IND AS-115 accounting standards. The developer reported an operating loss in the last fiscal as it had to provide for write-offs related to its older commercial projects in Kolkata and Chandigarh.
- SAIL: The state-run steel producer’s margin is expected to rise to an eight-year high due to a strong steel pricing environment and operating efficiencies led by lower raw material and employee costs and a better product mix.
- Prestige Estates: Higher rental income and increasing revenue contribution from high margin inventory is expected to aid the company’s operating margin in FY19.
- Dish TV: Completion of the merger with Videocon D2H is expected to boost its Ebitda margin as it will realise synergy benefits in backend, information technology, marketing cost and infrastructure.
- Vodafone India: Higher cost and lower revenue due to intense competition in the telecom market will lead to a reduced margin. The margin for FY18 reflects that of Idea Cellular Ltd., while for FY19 estimates are for the combined entity Vodafone Idea Ltd.
- Engineers India: A change in revenue mix and lower portion of revenue coming from high margin consultancy business is expected to lead to lower margin.
- Bharti Infratel: Higher energy cost and tenancy cancellations which resulted into lower tower rentals is expected to lead to lower margins.
- Shree Cement: Higher freight and power & fuel costs due to an increase in petcoke prices and other higher other expenses due to foreign exchange losses, resulting in lower margin.
- InterGlobe Aviation: Margin is expected to tumble to a five-year low in FY19 due to weak ticket prices, rupee depreciation and higher fuel cost.