6A.15 Sector KPIs beyond banks: what moves each sector on results day

Motivation

For most companies a handful of operating numbers carries more information about future earnings than this quarter's profit. These are the numbers analysts model, the ones the press release leads with, and the ones whose surprise moves the price. 6A.10 did banks (NIM, credit cost, GNPA/NNPA, PCR, the ROE tree) and 6A.11 did the cyclical, IT and consumer models. This section lists, for seven more sector groups, three to five KPIs each: the definition, where it is published, how it feeds value, and the pitfall. Definitions are as commonly used by Indian listed companies as of Nov 2026; a company's own footnote overrides them.

A rule for all sectors A KPI moves the price through what it implies for the inputs of M06's valuation: next year's revenue (volumes, order inflow, premium), the margin, the capital needed to grow (working capital, capex) and the length of the growth runway. A KPI surprise that changes only the current quarter (a one-off product, an inventory gain) should move the price by about the change in that quarter's earnings; one that changes the trend moves the multiple.

6A.15.1Pharmaceuticals#

KPI	Definition and source	Why it matters	Pitfall
US generics revenue (USD)	Sales of generic drugs in the US, in dollars, QoQ. Press release and presentation.	The US is the largest profit pool for the large Indian generics companies; dollar growth removes the rupee effect (6A.23).	A limited-competition product (a launch with 180-day exclusivity under a Paragraph IV challenge, or a shortage-driven product) can add a large but temporary amount. Ask how much of the quarter came from such products and when competition arrives.
Price erosion and new launches	Erosion: the annual fall in prices of the existing US portfolio; launches: products launched in the quarter. Management commentary.	Growth in US generics is launches minus erosion; a pipeline that does not keep up with erosion shrinks the business.	Erosion is rarely quantified exactly; treat stated ranges as management estimates.
ANDA filings and approvals	Abbreviated New Drug Applications filed with and approved by the US FDA; the pending count. Presentation; approvals on the FDA's public databases.	The pipeline of future launches.	Counts mix trivial and valuable products; the value is concentrated in a few complex ones (injectables, inhalers, biosimilars).
Regulatory status of plants	US FDA inspection outcome: a Form 483 lists observations at the end of an inspection; the inspection is classified NAI (no action indicated), VAI (voluntary action indicated) or OAI (official action indicated); OAI can lead to a warning letter or an import alert, which blocks shipments from the site. Company disclosure under LODR Regulation 30; warning letters are published on fda.gov.	A warning letter at a plant that supplies a large share of US revenue stops new approvals from that site and can stop supplies for years.	The 483 is issued on the last day of the inspection and usually disclosed at once; the classification comes months later. The price often moves twice.
India formulations growth vs the market	Domestic branded sales growth against the Indian pharmaceutical market (IPM; audited by private data providers). Presentation.	The domestic business is the steady, high-return half of most large companies.	Growth in price-controlled products is capped by the National Pharmaceutical Pricing Authority (NPPA) under the Drugs (Prices Control) Order; separate price, volume and new products.

Also watch R&D spend as a share of sales (the cost of the pipeline, often expensed) and gross margin (mix of US, India and emerging markets).

6A.15.2Automobiles#

KPI	Definition and source	Why it matters	Pitfall
Monthly volumes (wholesale)	Units dispatched from factories to dealers, domestic and export, by segment. Companies file monthly sales on the exchanges in the first days of each month; the Society of Indian Automobile Manufacturers (SIAM) publishes industry dispatches.	Revenue is volume times realisation, and two of the three months of a quarter are known before the results.	Wholesale is what the company sells to its own dealers.
Retail sales and dealer inventory	Vehicle registrations from the government's VAHAN database, as compiled monthly by the Federation of Automobile Dealers Associations (FADA). Inventory change ≈ wholesale − retail.	Retail is end demand. Wholesale above retail for several months builds dealer inventory, which must later be cut.	Registration timing lags sales around festivals; compare festival periods across years by the festival date, not the month (M10 · 10.13 makes the same point for gold).
Realisation per vehicle	Revenue ÷ units. Derived from the filing and the monthly volumes.	Mix (SUVs, premium motorcycles, exports) and price increases.	Includes spare parts and other revenue; define it the same way each quarter.
EBITDA margin and commodity costs	EBITDA ÷ revenue; raw materials (steel, aluminium, precious metals for catalysts) as a share of revenue. Filing.	Raw materials are the largest cost; price increases follow commodity costs with a lag.	Lags differ by company and contract; a margin jump can be a commodity dip, not pricing power.

Electric-vehicle share, production-linked-incentive income and export markets are company-specific; check each presentation's definitions.

6A.15.3Capital goods and defence#

KPI	Definition and source	Why it matters	Pitfall
Order inflow	Value of new orders received in the period. Press release, presentation, and LODR Regulation 30 disclosures of large orders during the quarter.	Next years' revenue.	Lumpy: one large contract can make a quarter. Use trailing four quarters.
Order book (backlog)	Value of unexecuted orders at the period end. Same.	Revenue visibility: order book ÷ trailing revenue is the years of cover.	Includes orders not yet funded or likely to be cancelled or re-scoped; check whether the company deducts them.
Book-to-bill	Order inflow ÷ revenue for the same period.	Above 1 the backlog grows.	With the identity below, it can be backed out when only the order book is disclosed.
Execution rate	Revenue ÷ opening order book (annualised).	How fast backlog converts into revenue; a falling rate with a rising backlog means delays.	Revenue is recognised over time on long contracts (Ind AS 115, Revenue from Contracts with Customers), so reported revenue depends on estimates of progress.
Net working capital and customer advances	Receivables + contract assets (unbilled revenue) + inventory − payables − customer advances, in days of revenue. Half-yearly balance sheet.	Defence and government contracts often carry large advances, which fund working capital and raise ROCE; when advances fall, cash flow suffers before profit does.	Receivables from government customers can rise sharply in some quarters and reverse later.

Proposition 6A.21order-book identity

If $B_t$ is the order book at the end of period $t$ , $I_t$ the order inflow and $R_t$ the revenue recognised from the book in period $t$ , and there are no cancellations or revaluations, then

I_t = B_t - B_{t-1} + R_t, \qquad \frac{I_t}{R_t} = 1 + \frac{B_t - B_{t-1}}{R_t}. \tag{6A.26}

So the book grows if and only if book-to-bill exceeds 1, and with constant book-to-bill $\beta$ and execution rate $x = R_t/B_{t-1}$ , the book grows at the rate $x(\beta - 1)$ per period.

Proof

The book at the end of the period is the opening book plus new orders minus orders executed: $B_t = B_{t-1} + I_t - R_t$ . Rearranging gives the first equation; dividing by $R_t$ gives the second. With $R_t = xB_{t-1}$ and $I_t = \beta R_t$ , $B_t = B_{t-1}(1 + x\beta - x)$ , so $B_t/B_{t-1} - 1 = x(\beta - 1)$ .∎

Cancellations and currency revaluation of export orders break the identity; a company that discloses the order book but not inflow has implicitly netted them into "inflow". Problem 6A.20 applies (6A.26) to BEL, the company of Playbooks 1 and 7.

Defence-specific For defence companies, the pipeline is visible earlier than orders: the Defence Acquisition Council's "acceptance of necessity" (AoN) approvals, announced by the Ministry of Defence, precede tenders and contracts by months to years. An AoN is not an order; the conversion rate and lag vary by programme.

6A.15.4Insurers#

Life insurers do not report a meaningful profit in their early growth years, because writing a policy creates acquisition costs now and profits over decades. The market values them on embedded value.

KPI	Definition and source	Why it matters	Pitfall
APE (annualised premium equivalent)	100% of regular first-year premiums + 10% of single premiums written in the period. Press release; IRDAI and Life Insurance Council monthly new-business data.	The volume of new business, comparable across regular- and single-premium products.	Group business and individual business behave differently; most companies report both.
VNB and VNB margin	Value of new business: the present value of future profits from the policies written in the period, net of the cost of capital; margin = VNB ÷ APE. Presentation (half-yearly or quarterly by company).	The economic profit of growth. Value $\approx$ EV + the present value of future VNB; VNB growth is the growth input.	Margins depend on product mix (protection and non-participating savings have higher margins than unit-linked) and on actuarial assumptions; a change in assumptions can move the margin without any change in business.
EV and operating RoEV	Embedded value = adjusted net worth + value of in-force business (VIF); operating return on EV = EV operating profit ÷ opening EV. Presentation; methodology per the Institute of Actuaries of India's APS 10.	The book value analogue: the fair P/EV depends on RoEV against the cost of equity, exactly as P/B depends on ROE in (6A.17).	Separate operating variances from economic variances (interest-rate and market moves).
Persistency	Share of policies (or premium) still in force at the 13th and 61st month. Public disclosures.	Lapses destroy the value of in-force business; persistency is a quality check on the sales channel.	Definitions (by count or by premium) differ; compare a company with itself.
Solvency ratio	Available solvency margin ÷ required solvency margin; IRDAI's control level is 150%. Public disclosures.	Capital adequacy and the need to raise equity.

For general (non-life) insurers: gross direct premium income (GDPI), the claims (loss) ratio, the expense ratio and the combined ratio (their sum; below 100% means underwriting profit), plus investment income. IRDAI requires both life and general insurers to publish standard disclosure forms quarterly on their websites.

6A.15.5IT services#

The model is in 6A.11.2. The KPIs, all in the press release and fact sheet:

Constant-currency revenue growth, QoQ (Proposition 6A.18). The most-watched number.
Deal wins (TCV) and book-to-bill; the share of new deals versus renewals.
EBIT margin and its bridge (wage hikes, currency, utilisation, pricing).
Headcount, net additions, last-twelve-month attrition and utilisation: supply-side signals for the next two quarters.
Guidance where the company gives it: some large Indian IT companies publish an annual constant-currency revenue growth range and revise it each quarter; others give only qualitative commentary (check the company's practice). For a company with guidance, the revision often matters more than the quarter.

Pitfall: a large TCV can be a renewal of an existing contract over many years, adding little to growth; ask about the net-new share and the tenure.

6A.15.6Consumer staples (FMCG)#

Underlying volume growth (UVG) and price growth: value growth = $(1+\text{volume})(1+\text{price/mix}) - 1$ (6A.11.3).
Gross margin against the input basket (palm oil, crude-linked packaging, milk, wheat, tea): falls first when inputs rise, recovers when price increases catch up.
Advertising and promotion (A&P) as a share of sales: a margin lever companies cut and restore; an EBITDA margin gain from lower A&P is not a gain in efficiency.
EBITDA margin, and commentary on rural versus urban demand and on channel mix (general trade, modern trade, e-commerce and quick commerce).

Pitfall: growth driven by price during input inflation reverses when inputs fall (price cuts). Volume is the cleaner demand signal.

6A.15.7Metals#

Sales volume (tonnes) by product; companies often publish production and sales updates within days of the quarter end, before results.
Realisation per tonne (net sales ÷ tonnes) against benchmark prices: domestic flat steel, London Metal Exchange (LME) aluminium, copper and zinc.
EBITDA per tonne: realisation minus cash cost (iron ore, coking coal, power, alumina). Spread leverage (6A.21) applies: a small change in realisation moves EBITDA per tonne several times as much.
Net debt ÷ EBITDA: balance-sheet risk through the cycle.
Standalone versus consolidated: Indian steel and aluminium groups own large overseas operations whose margins differ; read both.

Industry data: the Joint Plant Committee of the Ministry of Steel compiles monthly Indian steel production and consumption; LME publishes official prices daily. Pitfall: inventory gains or losses when prices move sharply (as for oil marketers in 6A.11.1), and the P/E inversion of (6A.22): low multiples at peak earnings.

6A.15.8Other sectors, one line each#

Telecom: average revenue per user (ARPU) and subscriber additions. Real estate: pre-sales (bookings) and collections, not recognised revenue (which lags by years under Ind AS 115). Regulated utilities: the regulated return on equity on the regulated asset base. Cement: 6A.11.1. Banks and NBFCs: 6A.10.

6A.15.9Practitioner notes#

Build each company's KPI history from its presentations into a table you maintain; definitions change, and you will only see it if you keep the history.
Some KPIs are known before results (auto volumes, metal production updates, insurers' monthly APE, IT companies' large-deal announcements). The results-day surprise is then concentrated in margins and guidance.
The relation between a KPI surprise and the price is an empirical claim. Test it as an event study (M12 · 12.1–12.3), with a pre-registered definition of "surprise", before trading on it; the multiple-testing warning of M04 · 4.6 applies to every sector you try.
See it live: https://oicharts.com/sectors shows how each sector index is moving on a results day.