Indian companies' profit growth was muted during the quarter ended June from a year ago, with estimate misses overtaking the beats. Sequentially, profit fell during the April–June period.
The cumulative profit of Nifty 50 constituents rose 3.96% year-on-year but fell 8.3% sequentially. During the period, cumulative revenues of Nifty 50 rose 0.58% from a year ago, while operating profit of the non-financial constituents declined marginally.
Over half the companies in the Nifty benchmark reported results in line with estimates, while 12 performed below expectations, according to analysts tracked by Bloomberg.
The number of companies that beat estimates fell to nearly half of those recorded in the last quarter.
Companies in the fast-moving consumer goods space and metals and mining sectors led the disappointment, with three out of five and three out of four companies, respectively, reporting results below their consensus estimates.
Those from the financial services sector saw three companies delivering an earnings disappointment in terms of their bottom-line figures, while two companies — just like in the automobile space — beat estimates.
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Adani Enterprises Ltd. recorded the highest profit growth among the index constituents at over 160% year-on-year, led by strong growth in the new energy ecosystem segment, whose profits grew by nearly five times.
Sequentially, Bharti Airtel Ltd. tops delivering the biggest profit growth that more than doubled on account of one-time interest waiver on variable licence fees worth Rs 735 crore in the quarter.
The biggest disappointment in terms of profit was recorded by JSW Steel Ltd., whose profits declined by over 64% against the year ago period.
The company saw a reversal in prices due to heavy inflow of imports, according to a SBI Securities note.
Among the constituents whose results are compared sequentially, Bharat Petroleum Corporation Ltd. saw the largest profit decline of over 28% on a standalone basis as average gross refining margin fell 37% to $7.86 per barrel. However, the profit beat consensus estimates as per analysts tracked by Bloomberg.
Automobile and Auto Components
Eicher Motors beat estimates with a 20% rise in profits against the year ago period due to a higher average selling price, and higher mix of more than 350 cc vehicles in domestic business, as well as a higher spare parts mix, according to Kotak Securities.
Profits for the quarter also included a writeback of deferred tax due to moving to a lower tax regime, from a 35% tax regime earlier, a Phillip Capital note said.
Maruti Suzuki India Ltd. reported a nearly 47% rise in profits led by an inventory gain of Rs 895.2 crore.
Construction
Despite the fiscal first quarter being a seasonally weak one, according to a Motilal Oswal note, Larsen & Toubro Ltd. beat profit estimates due to a 42% year-on-year growth in international orders.
Construction Materials
Profits for UltraTech Cement Ltd. remained largely unchanged during fiscal first quarter, compared against the same period last year, mainly due to a decrease in average selling price across the country, according to an IDBI Capital note.
Consumer Durables
A high base effect, price cuts, andsubdued demand led Asian Paints Ltd.’s profits to be lower than analysts’ expectations
Fast Moving Consumer Goods
ITC Ltd.'s performance was impacted by the paperboards and the FMCG business on the back of a challenging macroeconomic and operating environment, leading to a miss against street estimates and less than 1% of profits.
Nestle India Ltd. also delivered results below expectations due to unprecedented price hikes in coffee and cocoa.
Profits for Tata Consumer Products Ltd. fell 12% against the year ago period, missing consensus estimates.
"[An] improvement in operating performance was more than offset by finance cost and amortisation charges," the company said in an exchange filing.
Financial Services
Axis Bank Ltd. missed estimates for profits during the quarter as provisions grew to nearly doubled in the same period last year.
Profits for Kotak Mahindra Bank Ltd. grew 81% during the quarter, compared against the year ago figure, beating estimates owing to a one-time gain from divestment of stake in general insurance arm at Rs 3,520 crore.
Healthcare
Profits for the drug-maker Sun Pharmaceuticals Ltd. rose 40% year-on-year, aided by lower research and development related expenses and higher other income.
Information Technology
HCL Tech Ltd. recorded a nearly 7% rise sequentially, beating estimates, driven by divestment gains during the quarter.
Metals & Mining
Hindalco Industries Ltd. missed estimates despite a 25% rise in profits on a year-on-year basis. Tax expense grew 159% compared the against the year ago period.
Tata Steel Ltd. missed estimates due to an exceptional loss of Rs 357.9 crore, owing to restructuring and other provisions, as well as contribution to electoral trusts.
Services
Adani Ports and Special Economic Zones Ltd. beat estimates with a 46% rise in profits against the year ago period. It recorded an exceptional gain of Rs 603.2 crore on account of a stake sale in a terminal asset.
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