Nil growth! Nifty pack likely to report flattish profit in Q2

After eight quarters of growth, Nifty as a pack is likely to report flattish year-on-year (YoY) profit in the September quarter, likely hurt by a weak show by metal producers and BPCL. Net sales growth for the 50-pack index is seen at 20-23 per cent, but that is largely due to a low base.

Nine Nifty companies including Tata Steel, JSW Steel, UltraTech Cement, Apollo Hospitals, and Hindalco may report a Y-o-Y decline in profit, Motilal Oswal said while expecting BPCL to post losses. Fourteen others are likely to report profit growth in excess of 30 per cent Y-o-Y. These would mainly be automobile makers, telecom operators, and NBFCs, the brokerage said.

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All in all, Motilal Oswal expects corporate earnings for Nifty50 pack will be flat after eight quarters of growth. Excluding metals and OMCs, it sees Nifty earnings growing at 27 per cent. It sees Nifty Ebitda growing at 3 per cent YoY and profit before tax (PBT) at 1 per cent. Excluding metals and oil & gas companies, Nifty Ebitda may grow at 15 per cent and PBT at 25 per cent, Motilal Oswal said.
Elara Securities expects Q2FY23 sales for Nifty to grow 20 per cent YoY on a low base. The year-ago quarter was marked by a fragile economic recovery in the backdrop of Delta-variant of Covid-19.
Nifty pack may see a 0.2 per cent YoY drop in net profit, Elara Securities said. Excluding energy companies, it sees Nifty profit rising 5.7 per cent YoY for the quarter.

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"Energy earnings are expected to see a sharp decline with the PAT of Nifty Energy companies declining 21 per cent YoY and 39 per cent QoQ, led by inventory losses, negative marketing margin and high cost of natural gas," Elara said.
Estimates by Kotak Institutional Equities are no different. This brokerage expects Nifty profit to be muted both on YoY basis (up 1.1 per cent) and a sequential basis (up 0.3 per cent). Kotak, however, expects net profit for the Sensex pack to increase 9 per cent YoY and 6 per cent QoQ.
Top line for Nifty pack may grow at 23.3 per cent, Kotak Institutional Equities said.
The earnings season will officially kick off on Monday. TCS, an index heavyweight, will announce its quarterly earnings during the day. HCL Technologies and Wipro will announce their results on October 12 and Infosys on October 13.