Reading Quarterly Results in India: Complete Guide to Analyzing Company Earnings

Meera’s Results Day Disaster

Meera bought Infosys before Q2 results. The results came: “Infosys beats estimates, profit up 10%.”

She expected the stock to rally. Instead, it fell 5%.

“How can good results lead to a fall?” she wondered.

The answer: The market looks beyond headlines. Revenue guidance was reduced. That mattered more than the quarterly profit.

This guide teaches you to read results like an analyst, not like headline news.

Why Quarterly Results Matter

The Report Card Analogy

Quarterly results are like a company’s report card every 3 months.

Annual Report: Full year, comprehensive Quarterly Results: Progress update, timely

What Results Tell You

When Results Are Announced

Result Season in India

Where to Find Results

Understanding the Results Format

Key Documents Released

Standard Results Template

When you open results, you’ll typically see:

STANDALONE / CONSOLIDATED RESULTS
Quarter Ended: [Date]
(All figures in ₹ Crores)

Revenue from Operations
Other Income
Total Income
Expenses
EBITDA
Depreciation
EBIT
Interest
Profit Before Tax
Tax
Profit After Tax (PAT)

Key Numbers to Focus On

1. Revenue (Top Line)

What It Is: Money earned from selling products/services

What to Check:

Good Sign: Revenue growing YoY consistently Warning Sign: Revenue declining or growing slower than industry

2. EBITDA (Operating Profit)

What It Is: Earnings Before Interest, Tax, Depreciation, Amortization

Formula:

EBITDA = Revenue - Operating Costs (excluding Depreciation & Interest)

Why It Matters: Shows operational efficiency before accounting adjustments

EBITDA Margin:

EBITDA Margin = EBITDA / Revenue × 100

3. Net Profit (PAT)

What It Is: Final profit after all expenses and taxes

PAT Margin:

PAT Margin = PAT / Revenue × 100

Important: Compare PAT growth with revenue growth

• If Revenue up 10%, PAT up 15%: Operating leverage working
• If Revenue up 10%, PAT up 5%: Margin pressure

4. Earnings Per Share (EPS)

Formula:

EPS = PAT / Number of Shares Outstanding

Why It Matters: Profit attributable to each share you own

Revenue Analysis Deep Dive

Breaking Down Revenue

Companies often provide segmental breakdown:

Example: IT Company

What to Look For:

• Which segments are growing faster?
• Any segment declining?
• Dependency on one segment?

Geographic Revenue

Example: Pharma Company

Currency Impact: If rupee weakens, US/Europe revenue in rupee terms increases.

Margin Analysis

Types of Margins

Margin Trend Analysis

Example: FMCG Company

Analysis: Margins improving throughout year - good sign (maybe input costs falling or pricing power).

Margin Comparison

Compare with:

• Previous quarters (trend)
• Same quarter last year (seasonality-adjusted)
• Industry peers (competitive position)

Other Important Numbers

1. Other Income

What It Is: Income from non-core activities (interest, investments)

Watch For:

• Sudden spike: One-time gains? Asset sales?
• Large %: Is core business weak?

2. Interest Expense

Trend: Should be stable or declining (if debt reducing)

Warning: Rising interest expense with rising debt

3. Tax Rate

Effective Tax Rate = Tax Expense / PBT

Normal Range: 25-30% for most companies

Watch For:

• Very low rate: Tax benefits or deferrals?
• Very high rate: Unusual adjustments?

4. Exceptional Items

What They Are: One-time gains or losses

Examples:

• Asset sale (gain)
• Restructuring cost (loss)
• Legal settlement (either)

Important: Strip out exceptional items for normalized profit.

Quality of Earnings

Cash Flow vs Profit

Rule: Profit should be backed by cash.

Comparison:

Operating Cash Flow (from cash flow statement)
vs
Net Profit (from P&L)

Working Capital Check

If working capital is increasing faster than revenue:

• Inventory building up?
• Customers paying slower?
• Suppliers paid faster?

All these consume cash despite showing profit.

Conference Call Insights

Why Conference Calls Matter

Numbers tell you what happened. Conference calls tell you why and what’s next.

What to Listen For

Red Flags in Conference Calls

Standalone vs Consolidated Results

What’s the Difference?

Which to Use?

Use Consolidated for:

• Overall company picture
• Most investment decisions
• Companies with significant subsidiaries

Use Standalone for:

• Parent company health
• Dividend source (paid from standalone profits)
• Regulated entities (like banks)

Example: Reliance Industries

Consolidated includes Jio, Retail, etc.

Sector-Specific Metrics

Banking

IT Companies

FMCG

Auto

Comparing Results to Expectations

Analyst Estimates

Before results, analysts publish expectations:

• Revenue estimate
• EBITDA estimate
• PAT estimate
• EPS estimate

Beat or Miss?

Where to Find Estimates

• Bloomberg (paid)
• MoneyControl (consensus)
• Broker research reports
• Analyst on Twitter/LinkedIn

Reading Results: Step-by-Step

Step 1: Quick Scan (5 minutes)

Step 2: Deep Dive (30 minutes)

• Read press release for management commentary
• Check segment-wise performance
• Look at margin trends
• Review any exceptional items
• Check guidance/outlook

Step 3: Listen to Conference Call (1 hour)

• Management’s tone and confidence
• Future outlook
• Answers to analyst questions
• Any concerns raised

Step 4: Make Notes

Document:

• Key positives
• Key negatives
• Changes to your thesis
• Action (buy more/hold/reduce)

Red Flags in Quarterly Results

Warning Signs

Example: Warning Sign Analysis

Company X Results:

• Revenue: ₹1,000 Cr (up 15% YoY) ✓
• PAT: ₹100 Cr (up 20% YoY) ✓
• OCF: ₹20 Cr (down 50% YoY) ✗
• Receivables: Up 40% ✗
• Inventory: Up 30% ✗

Analysis: Profit looks good, but cash isn’t coming in. Customers may be paying late (credit sales). Inventory building up. This is a red flag despite good headline numbers.

Post-Results Action

Immediate (Results Day)

1. Read headline numbers
2. Note any guidance
3. Check stock price reaction
4. Don’t make impulsive decisions

Next Day

1. Read full results and presentation
2. Listen to conference call
3. Update your analysis
4. Decide on action

Action Framework

Building Your Results Calendar

Set Up Alerts

Create a Tracking Sheet

Practice Exercise

Analyze These Results

Company: ABC Ltd (Hypothetical)

Questions:

1. Is revenue growth healthy?
2. Is profitability improving?
3. What does margin expansion tell you?
4. Would you buy this stock?

Analysis:

• Revenue growing 11% - moderate (check industry growth)
• Margins improving - positive (operating leverage)
• PAT growth 20% > Revenue growth 11% - excellent
• Need: Cash flow data, guidance, valuation context

Resources

Where to Learn More

Practice Regularly

1. Pick 5-10 companies you follow
2. Read their results every quarter
3. Listen to conference calls
4. Track your predictions vs actual

Action Plan

This Quarter

• Identify 5 companies to track
• Set up results date alerts
• Read at least 3 results in detail
• Listen to 1 conference call

Ongoing

• Review all holdings’ results quarterly
• Note guidance changes
• Update your investment thesis
• Improve with each quarter

Risk Disclaimer

Quarterly results are one input to investment decisions. Short-term results can be volatile. Don’t overreact to one quarter. Focus on trends over multiple quarters. Consider consulting a SEBI-registered advisor.

Summary

Reading quarterly results is a critical skill:

1. Focus on Key Numbers: Revenue, EBITDA, PAT, margins
2. Look Beyond Headlines: Quality of earnings, cash flow
3. Listen to Management: Conference calls reveal intent
4. Compare Thoughtfully: YoY, estimates, peers
5. Don’t Overreact: One quarter ≠ permanent change

Learn to read results, and you’ll make more informed investment decisions.

Social Media Posts

LinkedIn: “Company beats profit estimates. Stock falls 5%. New investor: ‘This makes no sense!’ Experienced investor: ‘What did the guidance say?’ Reading quarterly results isn’t about headline numbers. It’s about the story behind them. Learn to read, not just react. #QuarterlyResults #Investing”

Twitter/X: “How to read quarterly results in 5 minutes:

1. Revenue growth YoY
2. PAT growth vs revenue growth
3. Margin trend
4. Any guidance change
5. Cash flow vs profit

If profit grows faster than revenue and cash backs it up, it’s a good quarter. Simple. #StockMarket”

Instagram: “What analysts look at in quarterly results 📊

✅ Revenue growth (demand) ✅ Margin expansion (efficiency) ✅ Cash flow (quality) ✅ Guidance (future) ✅ Management commentary (intent)

Headlines are 10%. Details are 90%. Learn to read the details! 📈

#QuarterlyResults #StockMarketIndia”