BHEL, Tata Power, Lupin, PFC, Pidilite Q2 results preview: Here's what analysts expect

A host of companies are scheduled to report their results for the quarter ended on September 30, 2023 today. The list includes names such as Power Finance Corporation Ltd (PFC), Tata Power Company Ltd, Bharat Heavy Electricals Ltd (BHEL), Pidilite Industries Ltd and Lupin Ltd. Here's what various brokerage firms expects from these companies in the second quarter of the ongoing financial year:

Pidilite Industries
Sharekhan pegs Pidilite's revenue at 3,189 crore for the September quarter, up 6 per cent on a year-on-year (YoY) basis but down 3 per cent quarter-on-quarter (QoQ) basis. Operating profit margin may rise 444 basis points (bps) YoY to 21 per cent but fall 55 bps sequentially, it said. Net profit is seen rising 32 per cent YoY to Rs 447 crore. On sequential basis, it  may fall 6 per cent, Sharekhan said.

"Consumer business to grow by 6 per cent while industrial products business to grow by 4 per cent. OPM is expected to improve YoY, led by price hikes undertaken previously. Net profit is expected to see high growth YoY, led by healthy revenue growth and expansion in OPM," Sharekhan said.

Kotak Institutional Equities sees Pidilite's sales at 3,160.4 crore, up 5 per cent YoY (down 4 per cent sequentially). Ebitda is seen at Rs 688.3 crore, up 38 per cent YoY but flat sequentially, with Ebitda margins expected to expand 517 bps on a yearly basis. Net profit may rise 40 per cent YoY to Rs 464.7 crore in the second quarter of the ongoing fiscal, Kotak said.

"We expect standalone revenue growth led by 6 per cent YoY growth in domestic C&B sales. We expect aggregate revenues of subsidiaries to grow by 1 per cent yoy to factor in the ongoing headwinds in the international markets. Our estimates imply consolidated revenue growth of 5 per cent. Consolidated GM to expand 15 bps qoq led by correction in VAM and crude derivative prices," it said.

Power Finance Corporation (PFC)
Phillip Capital pegs PFC's net interest income (NIIs) at Rs 3,632.80 crore, up 4 per cent QoQ but down 6 per cent YoY. Ebitda may come in at Rs 4,0340.7 crore, up 10 per cent QoQ and 6 per cent YoY. Net profit is seen at Rs 3,984.7 crore, rising 9 per cent QoQ and YoY. NIMs are pegged at 3,267.5 crore, up 9 per cent YoY and QoQ.

Loan book may witness mid-teen growth due to low base, disbursement under RDSS & LPS to gain traction and margin to remain stable sequentially, said Phillip Capital.

B&K Securities expects PFC to report a revenue of Rs 10,909.2 crore, up 8.2 per cent YoY and 7.6 per cent QoQ in the September 2023 quarter. EBITDA margins may expect 105 bps for the quarter. The company may report a net profit of Rs 3,176.1 crore, up 6 per cent QoQ and YoY.

Tata Power Company
Kotak Institutional Equities expects a flattish sales for Tata Power on both QoQ and YoY basis to Rs 15,100.60 crore in Q2FY24. However, it sees a 63 per cent YoY and 13 per cent QoQ growth in Ebitda at Rs 3,085.3 crore, with Ebitda margins surging 706 bps YoY to 20.4 per cent. The net profit is seen rising 36 per cent YoY to Rs 1,112.4 crore.

"Earnings from renewable portfolio will benefit from higher capacity base as well as strong execution at Tata Power Solar. Lower losses from Mundra as the plant was operating under cost-plus tariff during the quarter, even as coal mining profits moderate sequentially due to softness in realizations," said Kotak.

Antique Stock Broking ees Tata Power's bottom-line rising 14.4 per cent YoY to Rs 937 crore while it forecast sales at Rs 15,616 crore, up 11 per cent YoY. The Tata group firm may keep facing problems due to declining international coal prices, it said. Mundra plant, Antique Stock Broking said, continues to be an issue but the rest of the businesses stays stable, it added.

Investec anticipated strong results from Tata Group's utility arm led by an improvement in plant load factor (PLF) across Mundra station. It sees the rise in PLF to offset lower profitability in Tata Power's Indonesian coal business, hit by falling coal prices across the globe. This brokerage pegs profit at Rs 1,004.50 crore and sales at Rs 16,193.30 crore.
 
Lupin
Axis Securities expects Lupin to report revenue of Rs 4,865 crore in Q2FY24, flat on a sequential basis but up 17 per cent YoY. The drug maker's Ebitda is seen falling 7 per cent QoQ to Rs 800 crore with an Ebitda margin compressing to 16.4 per cent. Net profit is likely to be 20 per cent QoQ to Rs 362 crore. Ebitda, margins and PAT may rise sharply on a yearly comparison.

Lupin could report sales of $185 million in the US business on account of gSpiriva, gDarunivar and gSuperb sales in Q2FY24E. Its India business, too, is expected to do well as the company has hired 2,000 new MRs in the last year. Margins improvement would be the key monitoring point for this quarter, Axis added.

Sharekhan sees Lupin's revenue rising 17 per cent YoY to Rs 4,788 crore but flat on a QoQ comparison. Operating profit margins may come in at 18.8 per cent, rising 818 bps on YoY basis, while net profit can be seen at Rs 426 crore, zooming 217 per cent on a yearly basis, but marginally down sequentially.

"Sales growth to be driven by complex products like Spiriva, Brovana, Xopenex from the US market and healthy traction in the domestic region. Margins expected to inch higher driven by launches of complex products like gSpiriva. Healthy operations and lower tax rate to drive profitability," said Sharekhan.

Bharat Heavy Electricals (BHEL)
JM Financial expects BHEL to report a net sale of 5,775 crore, up 11 per cent YoY and 15 per cent QoQ, while EBITDA may contract to Rs 127 crore in the Q2FY24. However, the company may report a net loss of Rs 167.3 crore, against a net profit of Rs 12.1 crore in the year-long period.

BHEL is expected to see good traction going ahead on the back of increased thermal ordering with limited competition in the space, JM said. "We expect net sales to increase by 11 per cent YoY and 15 per cent QoQ led by improvement in the Industrial segment and marginal growth in the power segment. We expect EBITDA to remain negative due to lower operating leverage."

Prabhudas Lilladher expects BHEL's revenue to rise 16 per cent YoY to Rs 6,022.6 crore in the September 2023 quarter, with an positive EBITDA of Rs 78.3 crore and margins coming in at 1.3 per cent. The company may report a 71 per cent YoY rise in the net profit at Rs 17.6 crore.

“Revenue is expected to grow about 16 per cent YoY, led by pickup in execution amid low base. Management commentary on execution pace, working capital situation, order pipeline, diversification into non-power segment and margins will be key monitorables,” Prabhudas Lilladher added.

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