Top Stock Picks: The corporate earnings season for the September quarter is almost over. Corporate earnings in this quarter have been better than expected. According to brokerage house Motilal Oswal, from the September quarter, indications are clear that companies have started recovering from Covid 19. Looking at the situation after the lockdown, it can be said that this quarter has been the best in many years. At the same time, it is clear from the corporate commentary that the demand recovery that has been made will continue in the third quarter and beyond. The brokerage house has upgraded its rating to 10 shares after the second-quarter results. At the same time, it is advised to stay away from some stocks.
Sales growth as expected
According to the report, sales growth in the second quarter has been as expected. Companies have also benefited from better demand recovery, reduced expenses by companies, reduced provisioning expenses. Cement, private banks, public sector banks, healthcare, oil and gas, technology and utilities saw year-on-year growth in the September quarter. While, auto, capital goods, consumer, NBFC and retail sector declined on an annual basis. At the same time, telecom remained in deficit.
Nifty sales declined 6.7 percent year-on-year. Whereas EBITDA / PBT / PAT has grown at 8% / 14% / 17% on an annual basis. Whereas it was estimated to be -0.3% / – 7% / – 5%. 62 per cent of Nifty 50 companies have performed better than expected in terms of PAT.
Growth in 9 sectors, poor performance than expected
Profit growth has been witnessed in 9 sectors on an annual basis. These include Metal (152%), PSU Bank (67%), Cement (65%), Private Banks (53%), Healthcare (33%), Life Insurance (25%), Oil & Gas (14%), Technology ( 9%) and utilities (3%). While retail (-88%), auto (-11%), consumer (-3%) declined year-on-year, but still better than expected. At the same time, the performance of Capital Goods (-47%) and Telecom (loss of 6000 crores) was worse than expected.
Upgraded these 10 shares
SBI (19%), Tata Steel (18%), Axis Bank (17%), Bajaj Finance (15%), Kotak Bank (14%), Tata Motors (13%), Device Lab (12%), Infosys ( 12%), JSW Steel (11%) and Shree Cement (10%)
Tech Mahindra (-11%), Coal India (-8%), Hero MotoCorp (-6%)
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