Brokerages are content with India Inc’s performance in the June quarter, which was aided by a lower base in the same quarter last year given June 2017 being the pre-GST quarter. According to Kotak Institutional Equities, adjusted net profit growth of Nifty companies grew 12.3 per cent year-on-year (2 per cent above estimates) while net profit of its universe grew 12.5 per cent (14.4 per cent above estimates).

“Of the Nifty 50 companies, 13 companies (26 per cent) have reported numbers above expectation, 11 companies (22 per cent) have reported results in-line with expectation, 14 companies (28 per cent) have reported mixed set of numbers and 12 companies (24 per cent) have reported numbers below estimates,” pointed out Centrum Wealth Research. Net sales of 40 non-BFSI in the Nifty grew by 23.2 per cent y-o-y, whereas net profit grew by 21.3 per cent. Net interest income of 10 BFSI grew by 20.4 per cent, while net profit declined by 47.4 per cent, it added.

Within non-BFSI, consumer, metals, oil and gas (entire value chain), industrials, pharmaceuticals and information technology companies have done better while two-wheelers, telecom, Tata Motors, Power Grid Corporation and Coal India disappointed. Within BFSI, larger banks have disappointed while their smaller peers and non-banking finance companies have reported in-line or performance above expectations.

Headwinds

Going ahead, India Inc’s performance is at risk due to key headwinds such as higher crude prices, strengthening of dollar, geo-political issues and impact on the macro economy due to upcoming elections.

Kotak now expects 20 per cent growth in net profit of the Nifty 50 for FY19, compared to 23 per cent before Q1FY19 results season.

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