July 7 2024
Select cos from auto, banking, and pharma
could drive in double-digit growth in
aggregate topline and the bottomlione
Mumbai: Nifty 50 companies are
expected to report double-digit
growth in aggregate revenue and
profit for the June 2024 quarter driven by select companies from automobiles, banking and finance, and
pharmaceuticals sectors.
According to the ETIG estimates, the
sample’s net profit is expected to
grow by 26.4% year-on-year over a
strong base of 36.2% increase in
Revenue is likely to grow in double
digits after a gap of four quarters
by 10.6% in the latest June quarter
compared with the 6.9% increase
intheyear agoquarter.
“The earnings growth is expected
to be driven by domestic cyclicals,
such as banking, finance and insurance companies and automobiles,
with improved contribution of metals and healthcare,” said Gautam
Duggad, institutional research head,
Motilal Oswal Financial Services
According to Deepak Jasani, retail
research head, revenue may show a higher improvement due to lowerba se a year ago whereas the profit performance may remain mutedgivena
strong growth in profits in the base
quarter:
At 20.6%, the operating margin is likely to
remain above 20% for
the second consecutive quarter. Itmay shrink by atad 10
basis points compared with the year-ago level while showing a 30 basis point sequential improvement.
“Margins may broadly remain flat
with some sectors including metals, auto, defence, and power reporting better times,” said Jasani.
Duggad expectse leven out of seventeen major sectors under his covera- ge to show an year-on-year expansion in the margin. Analysts remain
positiveaboutfuture prospects while
highlighting geopolitical concerns.
“Outlook for the subsequent quarter
remains cautiously optimistic with
then ewgove rnment inplace,monsoon setting in across the country and
businesses preparing for the festival
season,” said Jasani
SECTOROUTLOOK
AUTOMOBILES
Despite slower sales volume growth in the June quarter, automobile companies are likely to reports trongnumbers helped by higher realisations and lower input
costs. MarutiSuzuki' sdomestic volume grew by 3.8% year-on-year
during the quarter while Tata Motorsreportedal.3% decline in passenger car volume. Among twowheeler manufacturers, barring
Eicher Motors, which reported a
‘margin0.4% drop in volume, other
manufacturers recorded volume
growthrangingfrom7% to17%. BANKING AND FINANCE
While credit growth remained healthy during the quarter, deposit growth slowed.
Slippages may inch
up given the stress from agriculture related credit. Net interest
margins are expected to remain
under pressure due toasustained
increase in deposit rates. Despite
odds, large banks and finance
companies may continue to show
double digit revenue and profit
growth.
CEMENT
Heat wave and shortage of labour
in some states impacted construction activities in the June 2024 quarter thereby affecting cement demand. The average cement price
fell by 3% to Rs348 per 50 kg bag during the quarter. Large companies
focused more on volume growth
which did not provide much scope
for price increase. Large cement
firms are likely to post 5-8% yearon-year growth in sales volume.
0 Comments