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    Q1 earnings: 26 companies that may report over 100% jump in profit

    Synopsis

    Domestic brokerage Motilal expects Nifty earnings to grow 25% YoY in Q1. Oil and gas sector may report a 3x surge in profit YoY underpinned by the improvement in marketing margins of OMCs. Auto sector’s earnings may surge 11x YoY during the quarter on a low base.

    Q1 earnings: 26 companies that may report over 100% jump in profitiStock
    With IT majors TCS and HCL Tech announcing their June quarter numbers on Wednesday, the Q1 earnings season of FY24 begins this week where domestic economy oriented companies like BFSI, industrials and auto are likely to lead the show.

    A moderation in inflationary pressures may lead to margin improvement of ~80 bps YoY mainly in FMCG, auto, and healthcare. "Overall, while earnings are lush, stress in top lines could be daunting, particularly given that both exports and consumption demand are moderating. Our conviction leans towards margin-sensitive sectors—FMCG, domestic autos, cement, telecom and internet," Nuvama's Prateek Parekh said.

    Domestic brokerage Motilal expects Nifty earnings to grow 25% YoY in Q1. Oil and gas sector may report a 3x surge in profit YoY underpinned by the improvement in marketing margins of OMCs. Auto sector’s earnings may surge 11x YoY during the quarter on a low base.

    According to estimates by various brokerages, there are at least 26 companies that may report at least 100% jump on a year-on-year (YoY) basis in the quarter.

    Auto
    June quarter season is being seen as a mixed bag with signs of volume growth moderation in some segments. Within the pack, at least six companies are expected to report over 100% YoY rise in quarterly profit.

    The quarterly profit of Apollo Tyres is seen rising at 114% to Rs 407.9 crore, while CEAT is seen reporting 1,288.3% rise in net profit.

    Samvardhana Motherson may come up with a 3-fold rise in bottomline to Rs 440 crore while India's largest carmaker Maruti Suzuki is expected to report a 123% jump in profit to Rs 2,261 crore. MRF, on other hand, may report 230% rise in PAT on the back of improvement in EBITDA margin expansion during the quarter, according to Motilal Oswal.

    Consumer
    Among consumer companies, P&G Hygiene quarterly net profit may see a rise of more than 103% to Rs 86.6 crore on the back of improvements in gross margin and EBITDA margin on a YoY basis over a weak base.

    Healthcare
    Led by new launches, market share expansion in key products and acquisition in US & India, ICICI Securities expects pharma companies under its coverage to report revenue/EBITDA/PAT growth of 15%/33%/28% YoY in Q1.

    Zydus Lifesciences is seen as reporting a doubling of profit to Rs 835.6 crore while Alkem's profit may grow 114.6% to Rs 273.9 crore. Dr Reddy's may report 119% jump in core PAT on higher gRevlimid sales, Mayne Pharma acquisition and share gain in gSuboxone.

    Motilal expects Alembic Pharma to report 191% rise in net profit to Rs 134.7 crore.

    Real Estate

    Brokerages estimate that residential sales might have improved 36% YoY (highest quarterly demand) despite the increase in housing prices (5–7% YoY) and mortgage rates. In line with seasonal trends, new project launches across markets are likely to moderate in 1QFY24 post-strong 4QFY23, Motilal said.

    Godrej Properties may report a massive PAT jump of 1,244% to Rs 582.2 crore on three-fold rise in revenues while Sobha may report 681% increase in profit to Rs 35.2 crore, shows estimates by Nuvama.

    Motilal expects Macrotech Developers to report 216.7% rise in net profit while Sobha is expected to deliver 620.6% growth in bottomline.

    The brokerage firm has picked Macrotech, Prestige and Godrej Properties as preferred picks in this space.

    Retail
    Trent is expected to continue to report a strong performance, driven by healthy same store sales growth and continued momentum in store additions. Its quarterly profit is seen rising 163.4% against strong revenue growth of 50% YoY.

    Banks
    India's largest lender State Bank of India (SBI) is expected to report 175% jump in its quarterly profit. "We expect operating profit growth to double (lower base as there was a treasury loss). We are building ~25% YoY NII growth on the back of 15% YoY loan growth," Kotak Equities said. State-owned Punjab National Bank (PNB) is likely to report a 234% rise in PAT while Equitas Small Finance Bank's quarterly PAT is expected to grow 105.6%.

    NBFC
    Motilal anticipates the disbursement momentum to remain buoyant and asset quality to remain largely stable in June quarter. The strong new business volumes were underpinned by a healthy underlying demand for vehicle finance, mortgages, personal loans, business loans and even gold loans, it said.

    M&M Financial, which is one of Motilal's top picks in the space, is seen as delivering 106.6% growth in June quarter profit to Rs 460.5 crore.

    Oil and gas
    Nuvama has forecast that the average EBITDA for oil and gas stocks under its coverage will rise 62% YoY/ led by strong OMCs, partially offset by ONGC and GAIL.On rise in marketing margins, BPCL's profit may rise 241%, HPCL's 146% and IOC's 666%.

    Others
    It is being estimated that Indus Towers will report 189% rise in profit but adjusted revenue is likely to be flat sequentially.

    Just Dial may report a 279% YoY rise in PAT while Hitachi Energy may see profit growing 508%.

    (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)



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    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

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