Q4 earnings preview: 17 Nifty firms may report over 20% rise in profit

An assessment by analysts on Dalal Street showed that the combined earnings of Nifty50 companies may grow in single digits for the quarter ended March 2024, propelled by the automotive and BSFI sectors. Brokerage Motilal Oswal Financial Services expects sales, EBITDA and profit after tax for Nifty constituents to improve by 9%, 9% and 6%, respectively, in Q4FY24. It further added that as many as 17 Nifty companies may report a profit after tax growth of more than 20% YoY, whereas 15 Nifty companies may witness a fall in PAT figures during the quarter.

The brokerage believes that private sector lender HDFC Bank may witness 30% YoY growth in profit after tax in Q4FY24. Other companies such as ONGC, Maruti Suzuki, Coal India, Titan and Dr Reddy’s Labs may witness more than 20% YoY rise in PAT in the March quarter. On the other hand, SBI (down 3%), Tata Steel (down 38%), BPCL (down 15.9%), Reliance Industries (down 8.9%)  JSW Steel (down 58%) are projected to drag the bottom line of Nifty figures.

“Overall earnings growth is anticipated to be driven by domestic cyclicals, such as auto and BFSI, which are expected to post 20% and 15% YoY growth, respectively. Conversely, earnings growth is expected to be weighed down by global cyclicals, such as O&G and Metals, which are anticipated to decline 6% and 12% YoY, respectively. Healthcare (33%) and cement (32%) are likely to report robust YoY earnings growth,” Motilal Oswal Financial Services said in a report.

On the other hand, Nuvama Institutional Equities anticipated that Nifty earnings to grow 5% YoY in Q4FY24. “With margin tailwinds fading, top line needs to recover, or else there could be risks to FY24–26 consensus EPS growth forecasts of 15–16%. Consensus forecasts of Nifty earnings for FY24, FY25 and FY26 are at Rs 966, Rs 1,104 and Rs 1,265, respectively,” Nuvama Institutional Equities said in a report.

It added that regarding demand, domestic-oriented sectors could be more vulnerable as consumption and private capex remain weak while government capex moderates. Rising oil prices could further weigh on profitability. However, low base and end-of-de-stocking in manufacturing could support exporter earnings.