India and Indonesia, shining stars in earnings constellation

BRIGHT SPOTS IN ASIA'S SKYLINE

India and Indonesia have emerged as the bright spots in the Asian pack during the December2023 quarter earnings season. According to an analysis by Nomura, of the78 companies that are part of the Morgan Stanley Capital International (MSCI) India Index, 35 have exceeded Street estimates, 25 have fallen short, and earnings for18 companies have met expectations. 

These 78 companies account for three-fourths of the weighting in the MSCl India Indexand15.6 per centin the MSCI Asia Ex-Japan (AxJ) Index. Nomura's analysis reveals that India’s beat-to-miss ratio stands at13 per cent, second only to Indonesia, which is at 38 per cent. 

India holds the second-highest weighting in the MSCl AxJ Index at 21.1 per cent, while Indonesia’s is just 2.2 per cent. China, with the highest weighting, has a beat-to-miss ratio of minus 19 per cent, with 26 companies surpassing expectations and 45 falling short. South Korea, the third-largest weigh, has a beat-to-miss ratio of minus 25 per cent. 

For the overall MSCI AxJ Index, the ratio is minus 11 per cent. “"More misses than beats, and therefore consensus earnings downgrades. But some bright spots too. Our analysis shows that companies that beat numbers were rewarded by the market, while misses were penalised," said a note by Nomura. SAMIE MODAK