Earning Season Report: There is a recovery in the earnings of companies for the December quarter.
Earnings Season Report: There is a recovery in the earnings of companies for the December quarter. Demand has improved with the removal of the lockdown and the opening of the economy. It has got a boost from festive demand. Apart from this, the strategy of controlling the expenses of companies also came to work. This has helped in increasing profits. Overall, it proved to be a blockbuster earning season and the companies performed better than anticipated. The earnings of Nifty companies have increased. Metal, auto and cement sectors are leading. Full Report of Brokerage House Motilal Oswal… ..
What is the reason for the increased erection?
- Demand recovery better than expected
- Cast control measures
- Festive season boost
- Strong Operational Delivery by BFSI Sector
- Good performance of cyclic sectors like metal, auto, cement, oil and gas
Good performance in these sectors
In the December quarter, auto, capital goods, cement, consumer, consumer durables, private and PSU banks, healthcare, metals, oil and gas, retail and technology sectors have outperformed the estimates. While the performance of NBFC, staffing and utilities has been predictable.
Sales of Nifty companies have fallen by 1 per cent on an annual basis, as was anticipated earlier. While EBITDA / PBT / PAT growth has been 15% / 23% / 22% on an annual basis. This is a better performance than expected. According to the brokerage house, 60 per cent of the companies have PAT better than the estimate, while only 18 per cent of the results have been weaker than the estimate.
8 sector growth in double digit
These include 8 sectors whose growth was in double digits on an annual basis.
Metal (454%), Cement (100%), Consumer Durables (61%), PSU Bank (+ 50%), Healthcare (+ 48%), Auto (+ 48%), O&G (+ 25%), and Technology. (+ 14%).
Whereas retail (+ 8%), consumer (7%), and private bank (+ 6%) have also seen good growth. The growth of utilities (+ 4%) was in line with the ratio. Whereas NBFC (-7%), Capital Goods (-6%), and Staffing (-6%) have reduced profits. The telecom sector has also suffered.
Top Upgrades (FY22E)
Tata Motors (36%), IndusInd Bank (35%), Axis Bank (21%), Eicher Motors (17%), Wipro (15%), ONGC (13%), Hidalco (9%), Asian Paints (8 %), Cipla (8%), M&M (8%), SunPharma (7%), Hero MotoCorp (7%), Tech Mahindra (7%), Airtel (6%), Powergrid (6%)
Top Downgrades (FY22E)
HDFC Life (-6%), SBI Life (-6%), Dr. Reddy’s Lab (-5%)
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