27 Nifty firms clocked 7% growth in Q4 profit; leaders & laggards

With 27 Nifty results out so far, the earnings season has been more or less in line with Street expectations. Eternal Ltd, Trent Ltd, Bajaj Finance Ltd, Adani Ports and Special Economic Zone Ltd, Shriram Finance Ltd and Mahindra & Mahindra Ltd are some of the Nifty constituents delivering 20-64 per cent year-on-year (YoY) rise in Q4 net sales. The profit growth has been led by Adani Enterprises Ltd, Tech Mahindra Ltd, Tata Consumer Products Ltd, Adani Ports and Wipro Ltd, data compiled with corporate database AceEquity showed. 

Data showed the 27 Nifty companies together reported 9.11 per cent year-on-year (YoY) rise in net sales at Rs 10,20,173 crore in Q4 compared with Rs 9,34,972 crore in the same quarter last year. Profit for these 27 companies grew 6.59 per cent to Rs 1,50,082.68 crore from Rs 1,40,810 crore YoY. 

"The March quarter corporate earnings has been in line so far, with heavyweights driving the aggregate," MOFSL said.  Among 24 of these Nifty results that MOFSL tracked, profit for the pack was up 7 per cent YoY against an estimate of 5 per cent YoY, led by ICICI Bank, HDFC Bank, Adani Ports, Wipro, Infosys, Bajaj Finance, and Reliance Industries.

On the flip side, Eternal Ltd, Trent Ltd and Infosys Ltd have seen their profits falling 77 per cent, 54 per cent and 11 per cent, respectively. Adani Enterprises Ltd and SBI Life Insurance Company Ltd reported sales de-growth of 7.58 per cent and 4.99 per cent, respectively.  Wipro Ltd, Hindustan Unilever Ltd, Nestle India Ltd and Tech Mahindra Ltd reported single-digit growth in sales. 

In the broader space, MOFSL said earnings spread has been decent, with 78 per cent of its coverage universe either meeting or exceeding profit expectations.  "The aggregate earnings of the MOFSL Universe companies were above our estimates and increased 8 per cent YoY (vs our estimate of minus 1 per cent YoY)," it said. 

Axis Securities said it sees consolidation in the market as the breadth is likely to remain narrow in the immediate term. "Our focus will remain on style and sector rotation along with earnings recovery. Going forward, we continue to believe that the positioning in the Indian market will likely be divided between the domestic-facing and export-facing sectors. We further believe that at the current juncture, the risk-reward balance favours domestic-facing sectors due to the nil to low impact of the reciprocal tax. Export-oriented sectors will be in a wait-and-watch mode, and the impact and development related to the reciprocal tax will be closely tracked," it said.

In a recent note, Kotak Institutional Equities said the Street is probably being too optimistic in its earnings estimates, especially for revenues of export-oriented sectors such as automobiles, IT services and potentially pharmaceuticals and specialty  chemicals in light of high levels of uncertainty on global GDP growth and tariffs in the US and on profitability of consumption companies by assuming that the companies will be able to retain the benefits of lower raw material prices

MOFSL said the market has rebounded smartly over the last two months, entirely erasing its year-to-date decline. 

"The Nifty is currently trading 2.9 per cent higher in CY25YTD. With the current rally, Nifty trades at 21x FY26E earnings, near its LPA of 20.6 times. While near-term challenges such as global macros, trade wars, and a weak 4QFY25 will keep the market volatile and jittery, we believe that the medium- to long-term growth narrative for India remains intact," MOFSL said.

The domestic brokerage prefers largecaps such as Reliance Industries, Bharti Airtel, ICICI Bank, HUL, L&T, Kotak Mahindra Bank, M&M, Titan, Trent and TCS. Among midcaps and smallcaps, the brokerage likes Indian Hotels, HDFC AMC, Dixon Tech, JSW Infra, BSE, Coforge, Page Industries, IPCA Labs, Suzlon Energy and SRF.