>Déjà vu- No major surprises (MERRILL LYNCH)

In-line profit growth: Profit growth for the Sensex companies came at 14.6%, slightly above our expectations of 14.4%. EBITDA growth was robust at 31.6% vs. our estimate of 28.2%. The good news is that the pre-tax profits surprised marginally at 28.2% (MLe 26.9%). However, Market was disappointed on the lack of big surprises and fell by 6% in January. Moreover, growth is highly concentrated with the Autos and Energy sector accounting for two-thirds of the growth as they benefited from the low base of the previous year. Telecom and Realty companies continue to be a drag on the Sensex earnings.

Margins expansion continues: EBITDA Margins across most sectors witnessed improvement with margins of Sensex companies expanding by close to 180bps on a YoY basis. This is primarily led by Autos (740 bps), Cement (790 bps) and Metals (380 bps). However, we believe with the rise in input prices it would be difficult to maintain the expansion going forward.

Sensex EPS unchanged; FY10 EPS downgrade likely: Post interim results our Sensex EPS estimates have largely remained unchanged for both FY10 and FY11. We expect our FY10 EPS to see some downgrades (flat vs 3% currently) led by global commodities especially Tisco and ONGC.

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