Hi,

Greetings from the DistrictD Team.

Now that FY25 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 FY25 actual numbers and our base model estimates. The analysis was performed on 1,223 companies this time, for companies which have March Year-end.

The key takeaways are:

• The Median of absolute "Revenue, EBITDA and EPS deviations" across 1,223 models stood at 7.23%, 13.69% and 17.19% respectively, almost similar with our numbers in the past years. For Nifty 200, i.e. top 200 constituents these numbers stood at 5.31%/10.11%/13.21% 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 focused 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 – Financials and Automobiles. Our models for several large cap companies such as Reliance Industries, HCL Technologies, Mphasis, Torrent Pharmaceuticals, Dr. Reddy Lab, Axis Bank, ICICI Bank, Pidilite Industries etc. had less than 5% deviation across Revenue/EBITDA/EPS.
• Inaccurate areas - Our model numbers were off in Infrastructure, Agriculture, Natural Resources and Oil & Gas. Companies where our models were off significantly were Grasim Industries, Godrej Industries, , Indian Oil Corp., Aditya Birla Fashion and Retail Ltd., Aditya Birla Real Estate Ltd, Adani Enterprises Ltd. etc.
• At overall topline level - Out of total 17 sectors, our models were broadly inline in 15 sectors including IT services, Financials, Automobiles, Manufacturing, Consumer, Healthcare, Agriculture etc. etc. While for Infrastructure and Telecom, 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'.