India Quant: Results Season Playbook: ASIA EX-JAPAN | Quantitative Strategy

Research evidence excerpt

India Quant: Results Season Playbook: ASIA EX-JAPAN | Quantitative Strategy

pgrade on average, while misses strongly have better 39.7 35

trigger a 3.6% downgrade. This means the risk of being wrong is much greater. 30 beats ratio 36.3

≥ +10% +5% to 0% to +5% 0% to -5% -5% to - ≤ -10%

+10% 10%

Q3: Which sectors are safer to hold through results season? Healthcare, pharma, Rel perf a month bef results

discretionary retail, FBT, and media have historically held up well through results regardless of . EPS beats ratio Sales beats ratio

Source: Jefferies, FactSet. Note: MSCI India IMI

whether the company beat or missed. Staples retail, utilities, insurance, software, and energy

are the most dangerous to hold, as a miss in these sectors is penalized significantly. Screens - Key stocks

Pre-results drift track record (p.13)

Q4: Can you tell in advance whether a stock is likely to beat? Two signals are useful. First, Pos - BSE, PNBHOUSI, POWERIND, HZ, MCX

analyst revisions in the weeks before results: stocks with downgrades tend to miss, esp. small Neg - TATATECH, CONCORDB, BECTORS, NIITMTS

caps. Second, price momentum: stocks that have been outperforming in the month before Results day reaction track record (p.14)

results are more likely to beat, esp. large/mid-caps. Combining the two signals is better. Pos - KVB, LICI, HONASA, VBL, TRIV

Neg - ROUTE, UJJIVANS, DMART, ACI, BECTORS

Q5: What should you do on results day itself? Watch the price reaction more than the headline Post-results follow-through track record (p.15)

Pos - ABB, NETWEB, DIXON, ERIS, ADSEZ

beat-or-miss label. A stock that outperforms strongly on results day tends to continue doing Neg - IRCTC, GRFL, AAVAS, ROUTE, FIVESTAR

well post-results, and vice versa.