4QFY21 Preview: FY 2021 has been somewhat different for the stock market. While the market fell sharply due to the lockdown in the beginning of the financial year, the Sensex and Nifty touched record levels in the last months of the financial year. At the end of the year, many stocks gave high returns to investors. Expectations of the economy to improve, corporate earnings to recover and Corona vaccination improved market sentiments. Starting today, the earnings season for the March quarter begins with TCS results. In such a situation, it will be interesting to see whether the companies will come on track in the March quarter. Or because of the challenges of COVID 19, expectations will not be fulfilled. Brokerage house Motilal Oswal has given a report in this regard.
Earning growth of Nifty companies in double digit!
According to brokerage house Motilal Oswal, the March quarter has proved to be better for the market than expected recovery in the economy and corporate earnings. It is expected that at the end of FY 2021, the earnings growth of Nifty companies can be 13 per cent. If this happens, it will be the best growth after FY 2011.
According to the report, PBT / PAT of companies can show 98% / 76% growth on an annual basis in the March quarter. This is possible due to economic recovery and low base. The annual growth in 14 out of 20 sectors can be 20 percent or more. In the March quarter, PAT growth could be up to 60 per cent on an annual basis in metals, private banks and automobiles.
The Nifty Sales / EBITDA / PBT / PAT is expected to grow 18% / 26% / 77% / 65% on an annual basis in the March quarter. Nifty FY21 EPS may see a slight reduction of 1 per cent. While the Nifty FY22 / FY23 EPS is expected to remain stable. Despite the challenges of overall COVID 19, the playing season is expected to be strong.
Which sector can see growth
According to the report, brokerage house Maotilal Oswal has given overweight rating to IT, Metal and Cement sector. BNSI has a marginally overweight rating in neutral. Capital goods are also kept in overweight category.
At the same time, ratings on telecom and healthcare have been reduced from overweight to neutral. Consumer and auto maintain neutral ratings. While energy and utility are kept in underweight category. The rating of Chola Finance and SBI Card has been increased in BFSI. The rating of SBI has also been increased. Britannia in the consumer sector, Gland Pharma and Device Lab in Health, L&T in Capital Goods and Federal Bank, Whirlpool, Gujarat Gas and LTTS in the midcap space.
Large-caps: ICICI Bank, SBI, Infosys, HCL Tech, Ultratech Cement, M&M, HUVR, Titan Company, Device Lab, Hindalco, SBI Card
Mid-caps: SAIL, IEX, L&T Technology, Chola Finance, Gland Pharma, Emami, Gujarat Gas, Orient Electricals, Varun Beverages, Federal Bank
(Note: We have given information here based on the report of the brokerage house. There are risks in the market, so be sure to consult the experts at your level before investing.)