Hi,

Greetings from the DistrictD Team.

Now that FY23 earnings have drawn to a close, we take stock of our model's baseline estimates. Just like every year, we did an analysis on the deviations in Revenue/EBITDA/EPS between FY23 actual numbers and our base model estimates. The analysis was performed on 983 companies this time, for companies which have March Year-end.

The key takeaways are:

• The Median of absolute "Revenue, EBITDA and EPS deviations" across 983 models stood at 7%, 13.5% and 19% respectively, much better than our numbers in the past years. For Nifty 200, i.e. top 200 constituents these numbers stood at 4%/7.8%/9.4% indicating that our numbers were broadly inline. 
• The conservative bias that we had in our estimates in the previous few cycles was noticeably lower this time around. Our team focussed on maintaining the estimates broadly inline with the company's actual performance trend through the quarters. Additionally as there were no major macro surprises the deviations were lower this time.
• Accurate areas – IT services, Oil and Gas, Automobiles and Services. Our models for several large cap companies such as Infosys, Reliance Industries, Axis Bank, Divis Lab, Titan, Indraprashtha Gas Ltd, TCS, Hindalco Industries, Sun Pharma Industries etc. had less than 5% deviation across Revenue/EBITDA/EPS. 
• Inaccurate areas - Our model numbers were off in Manufacturing, Media, and Agriculture. Companies where our models were off significantly were Piramal Enterprises, Bharat Dynamics, PVR Inox, BPCL, Maruti Suzuki, Cochin Shipyard etc.
• At overall topline level - Out of total 16 sectors, our models were broadly inline in 9 sectors inluding IT, Automobiles, Healthcare, Financials, Services and Consumers. While for Manufacturing, Agriculture and Media we were significantly behind actuals.  

We measure the quality of our models on a few parameters mainly being: 

• The deviation that a base model has with the actual reported number at the end of the year on Revenue and EBITDA. We aim to keep this value within a range of +/- 10%.
• The models should as much as possible reflect a true operational model of the company.

Do note that our models are typically updated at the start of the year and are basically to help investors project their own views of the companies they are looking at. Do let me know if you would like to have a closer look at the data. Below are the results:

To check company-wise detailed analysis, please visit on our page 'Model Variances'.