No growth! Nifty pack likely to report flat gains in Q2

After eight quarters of growth, Nifty as a pack is likely to report flat year-over-year (YoY) gains in the September quarter, likely hurt by a weak show from metal producers and BPCL. Net sales growth for the 50-pack index is estimated at 20-23 percent, but that’s largely due to a low base.

Nine nifty companies, including Tata Steel, JSW Steel, UltraTech Cement, Apollo Hospitals and Hindalco, may report a year-over-year profit decline, Motilal Oswal said, expecting BPCL to post losses. Fourteen others are likely to report earnings growth of more than 30 percent year-over-year. These would mainly be car manufacturers, telecom operators and NBFCs, according to the brokerage.

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Overall, Motilal Oswal expects corporate earnings for the Nifty50 pack to be stable after eight quarters of growth. Excluding metals and OMCs, the company sees Nifty’s profits grow 27 percent. It sees Nifty Ebitda growing 3 percent year-on-year and earnings before tax (PBT) growing 1 percent. Excluding metals and oil and gas companies, Nifty Ebitda could grow 15 percent and PBT 25 percent, Motilal Oswal said. Elara Securities expects Nifty’s sales to grow 20 percent in the second quarter of 23 years on a low basis. A year ago quarter was marked by a fragile economic recovery against the backdrop of the Delta variant of Covid-19. Handy package could see a 0.2 percent yoy decline in net profit, Elara Securities said. Excluding energy companies, it sees Nifty’s profits rise 5.7 percent yoy for the quarter.

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“Energy revenues are expected to show a sharp decline, with Nifty Energy companies’ PAT declining 21 percent year-over-year and 39 percent quarter-on-quarter, led by inventory losses, negative marketing margin and high natural gas costs,” Elara said. Estimates by Kotak Institutional Shares are no different. This brokerage expects Nifty earnings to be muted on both an annualized (up 1.1 percent) and sequential basis (up 0.3 percent). However, Kotak expects net profit for the Sensex package to grow 9 percent year-on-year and 6 percent quarter-on-quarter. The topline for the Nifty package could grow by 23.3 percent, according to Kotak Institutional Equities. The results season officially starts on Monday. TCS, a heavyweight in the index, will release its quarterly results during the day. HCL Technologies and Wipro will announce their results on October 12 and Infosys on October 13.

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