Words which are the names of the points of the compass are compounded, when the compound signifies the intermediate point and the compound so formed is bahuvrīhī,
Thus दक्षिणपूर्वादिक् dakshina-purva, 'south-east,' (the direction midway between south and east.) पूर्वोत्तरा 'north-east.'
The word नाम is introduced in the sūtra to indicate that no compounding takes place when the words denoting direction are derivative words whose primary signification is not indicative of direction; as ऐन्द्र्यश्चकौबेर्याश्च दिशोर्यदन्तरालम् ' the point between cast and north'. Here the words ऐन्द्री 'east' and कौबेरी 'north' though denoting directions, are derivatively so, and hence no compounding.,