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    Q2 results: These 17 companies are likely to report loss. What should investors do?

    Synopsis

    Restaurant Brands Asia, which runs Burger King India, is seen reporting a quarterly loss of Rs 15.7 crore. While Kotak has a 'reduce' rating on the stock, Motilal has given a buy rating.

    Q2 results: These 17 companies are likely to report loss. What should investors do?Getty Images
    The script for investors in the September quarterly earnings season is unlikely to be different this time with domestic-focused cyclical sectors like banks, NBFCs, capital goods, and infrastructure expected to lead growth while export-oriented sectors such as chemicals and IT might see a subdued quarter.

    According to brokerage predictions, Nifty earnings are likely to grow 18-23% year-on-year (YoY) but may remain flat on a sequential basis.

    "On the whole, we forecast Nifty earnings would grow 18% YoY in Q2FY24 (Q1FY24: 33% YoY). It must be noted though that the quality of earnings is deteriorating. Furthermore, with BFSI earnings clearly losing momentum and margin tailwinds at fag end, demand outlook would be critical in shaping the earnings trends hereon," said Prateek Parekh of Nuvama Institutional Equities.

    Here's a look at 17 prominent companies that may report loss during the quarter.

    Domestic brokerage firm Motilal Oswal, which has a sell rating on India Cements, believes that the company will report a net loss of Rs 63.1 crore. "Expect volume to grow 6% YoY; while blended realization would decline 6% YoY mainly due to weak pricing in the South," Motilal said.

    Citing muted performance in both the domestic and US markets, Antique Broking expects pharma stocks to report subdued sequential growth of 3%. Solara Active Pharma is seen reporting a loss of Rs 7 crore in Q2 vs Rs 19 crore loss in the June quarter.

    Apparel retailer Aditya Birla Fashion is seen reporting a loss of Rs 182.3 crore during the quarter.

    "We model overall modest revenue growth of 8%/4% yoy/qoq on account of store addition and the addition of ethnic, TMRW and Reebok. However, we expect subdued SSSG from the core business and continued weakness in demand across segments, especially value (Pantaloons)," Kotak Equities said.

    Restaurant Brands Asia, which runs Burger King India, is seen reporting a quarterly loss of Rs 15.7 crore. While Kotak has a 'reduce' rating on the stock, Motilal has given a buy rating.

    V-Mart, which has indicated a single-digit decline in same store sales, may report a loss of Rs 46.4 crore.

    "EBITDA margin is likely to contract due to weak demand and higher spends towards the newly acquired online business," Motilal said.

    The loss pile of telecom operator Vodafone Idea, under stress due to debt and subscriber losses, may rise both sequentially and YoY to around Rs 8,000 crore in Q2.

    "We expect revenue and reported EBITDA to remain flat qoq as sequentially higher ARPU is offset by continued subscriber churn," Kotak said.

    Interglobe Aviation, which runs IndiGo airline, may report a loss of Rs 964 crore. Motilal said the average fare prices were lower by 8% on 1-month forward bookings while prices were down 15% on 15-day forward bookings.

    Among new-age stocks, Paytm, Delhivery and Zomato are seen reporting quarterly losses. Motilal sees Paytm's Q2 loss at Rs 276.7 crore while Zomato's loss is seen at Rs 70 lakh.

    Tata Steel may come out with Rs 152 crore loss and lower realisations on account of price cuts during the start of quarter and decline in standalone volumes.

    BHEL is expected to report Rs 271 crore loss, Nuvoco Vistas Corp Rs 7.6 crore, TCNS Clothing Co. Rs 36 crore, GMR Airports Rs 184 crore.

    What should investors do?
    CLSA's econometric regression model signals the market is currently at fair value with 22% potential upside in dollar terms.

    "We argue India’s margin contraction is late cycle, supporting a recovery in relative ROE and value creation versus EM. GDP growth dynamics are supportive of a sustained (c.15%) annual EPS expansion given India’s closely associated growth trajectories for economic output and corporate earnings," said CLSA's Alexander Redman.

    While upgrading Indian equities, the global brokerage firm has increased India portfolio allocation to 20% above MSCI benchmark.

    Top high conviction picks include RIL, HDFC Bank, ICICI Bank, Tata Motors, SBI and L&T.

    Prabhudas Lilladher, which sees Nifty going above 22,800 in next 12 months, is overweight on auto, banks, IT services, capital goods and healthcare.

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



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    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    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

    ...more
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