Cogencis Poll:Guidance key even as Nifty 50 profits seen doubling QoQ

Wednesday, Oct 14, 2020


By Nikita Periwal


MUMBAI – The net profit of companies in the Nifty 50 index is likely to more than double sequentially, though on a low base, as sales rise by a third in the September quarter.


Given that a lot of this earnings growth will be driven by pent-up demand, commentary on whether it is sustainable will dominate investors' attention. The guidance is also important as it comes just ahead of the festival period, which is seasonally strong for most consumer-facing businesses.   


Corporate India's confidence on whether earnings sustain will come in the backdrop of the number of new COVID-19 infections likely to have peaked out, a strong monsoon, and the government having front-loaded some spending to revive demand.


The country's largest mortgage lender, Housing Development Finance Corp, has already said that the demand for credit business is reverting to "pre-COVID" levels. Its sales are seen rising more 12% on quarter in Jul-Sep.


Earnings of banks, meanwhile, are seen largely steady compared to the previous quarter. Investor discussion for banks is likely to be around an improvement in collection levels and the quantum of restructuring for each bank, Kotak Institutional Equities said in a pre-earnings note.


After a stringent lockdown in April and most of May, the domestic economy has gradually been reopening, which led to unusual demand in several sectors such as fast-moving consumer goods, steel, and automobiles in the Jul-Sep period.


This was reflected in the Nifty 50 index rising more than 9% during the quarter. Sales of these 50 companies are seen falling 4% compared to a year ago, but the net profit is seen 12% higher, helped by various cost-cutting measures adopted by businesses, analysts said.


The sharpest recovery in earnings is likely in the automobile sector, reflecting a combination of pent-up demand, preference for personal mobility, a strong monsoon, and dealers stocking up ahead of the festival period.


Sales of six automobile makers on the Nifty 50–Bajaj Auto Ltd, Eicher Motors Ltd, Hero MotoCorp Ltd, Mahindra & Mahindra Ltd, Maruti Suzuki India Ltd, and Tata Motors Ltd–are seen more than doubling sequentially, and only 5% lower compared to a year ago.


Technology service providers are likely to record the best earnings, as they benefit from the increasing adoption of technology amid a pandemic. This is expected to reflect in their deal wins, and a more optimistic sales growth guidance for the year. 


Sector bellwether Tata Consultancy Services Ltd's earnings have already underscored this trend. Wipro Ltd, too, has guided for better-than-expected sales in the December quarter.


An average 26% jump in the sales of Shree Cement Ltd, UltraTech Cement Ltd and Grasim Industries Ltd will also be watched closely as a pick-up in cement demand is seen as a leading indicator of an overall pick-up in economic activity.    


Earnings of metal companies are also seen strong for a seasonally weak September quarter. The demand and pricing of steel has been robust, helped by consumption from the domestic market and negligible pressure of imports from China.  


Following are the Jul-Sep consensus earnings estimates for companies that constitute the National Stock Exchange's Nifty 50 index. These estimates are based on reports compiled by Cogencis from 27 brokerage houses.


Company  Sales       PAT  Sales    PAT  Sales    PAT    EBITDA  Result
 ——Average——-—–(Y-o-Y)—–—–(Q-o-Q)—–Mln Rupees    date
 —–Mln Rupees—–————–% Change————–  
Bajaj Auto72,13212,084(6)(14)13412912,531Oct 22
Eicher Motors +20,7443,323(5)(42)154     N.A.4,269      —
Hero MotoCorp92,2949,77222122111,49413,194Oct 28
M&M (MVML)122,24311,46812(15)1191,59215,925      —
Maruti Suzuki194,13115,7581416373     N.A.21,193      —
Tata Motors +530,355(27,740)(19)     N.A.66     N.A.43,097Oct 27
Total1,031,90024,666(7)(54)113     N.A.  
AXIS Bank *70,35414,35315     N.A.129      N.A.Oct 28
HDFC Bank *158,46571,439171317      N.A.Oct 17
ICICI Bank *94,68929,43818349213      N.A.Oct 31
Kotak Mahindra *37,15413,55511(21)(0)9      N.A.      —
SBI *269,41432,5591081(22)      N.A.      —
IndusInd Bank*32,3645,02611(64)(2)9      N.A.      —
Grasim Industries35,123613(27)(88)81     N.A.2,036      —
Shree Cement27,9273,432(0)1120(7)7,995      —
UltraTech Cement +90,1508,763(3)(11)22920,701Oct 21
UPL +85,8265,4281022710(1)18,229      —
L&T +319,49913,969(10)(45)5036127,619      —
Bajaj Finance*38,13210,58921(23)1622      N.A.Oct 21
Bajaj Finserv +*152,00514,891724723      N.A.Oct 21
HDFC *36,39723,22123(41)9(24)      N.A.Nov 02
HDFC Life Insurance Co#      N.A.3,893     N.A.26     N.A.(14)      N.A.Oct 19
SBI Life Insurance Co#      N.A.3,189     N.A.146     N.A.(18)      N.A.Oct 26
Britannia Industries +35,3235,11016263(6)6,720Oct 19
Hindustan Unilever 110,02020,1181294727,552Oct 20
Nestle India34,4575,6977(4)13178,463Oct 23
ITC113,56732,606(4)(19)273940,110      —
HCL Tech +184,39430,4315123447,703Oct 16
Infosys +241,95844,9947122663,476Oct 14
TCS +392,78278,9261(2)213105,605Oct 07
Tech Mahindra +92,74810,1662(10)2514,963Oct 23
Wipro +151,26225,108(0)(2)1532,751Oct 13
Titan Co37,403919(16)(71)101     N.A.2,052Oct 28
Total37,403919(16)(71)101     N.A.  
Hindalco Industries316,9477,8677(19)25     N.A.34,698      —
JSW Steel +177,5479,4391(63)51     N.A.34,668Oct 23
Tata Steel +348,5513591(99)44     N.A.41,506      —
Total843,04517,6643(75)37     N.A.  
OIL & GAS        
BPCL537,15615,064(17)(12)38(27)25,319      —
GAIL 153,92911,011(15)32733116,315      —
Indian Oil Corp894,21230,889(20)448436260,670Oct 30
ONGC170,77719,430(30)(69)3129274,476      —
Reliance Ind633,09455,434(27)(43)33(43)98,160      —
Cipla +46,8705,7467228(1)10,134Nov 06
Divi's Laboratories16,5474,3381823(3)(12)6,185      —
Dr. Reddy's Lab +46,3206,223(4)(44)5510,779Oct 28
Sun Pharma +78,68511,254(3)64     N.A.18,864      —
POWER & ENERGY        
NTPC 249,38230,99110(5)62577,423      —
Coal India +210,50427,6593(21)143336,413      —
Power Grid95,55229,029101564783,887      —
Bharti Airtel +244,9181,40316     N.A.2     N.A.104,384Oct 27
Total244,9181,40316     N.A.2     N.A.  
Asian Paints +49,4496,660(2)(19)6920510,436Oct 22
Adani Ports and SEZ +28,75110,0012(5)253218,038      —
Nifty Total8,172,504815,891(6)1328110  



Company name    Sales   Cogencis     PAT  Cogencis     EPS  Result 
    estimates  estimates  (in Rs)    Date
TCS +401,350392,78274,75078,92619.93Oct 07
Wipro +150,967151,26224,65725,1084.32Oct 13


+ Consolidated Figure 
* Net interest Income 
Y-o-Y: Year-on-Year 
Q-o-Q: Quarter-on-Quarter
N.A.: Not Available 
Rs: Rupees 
Estimates from: 

Anand Rathi Share and Stock Brokers Ltd, Antique Stock Broking Ltd, Axis Capital, BOB Capital Markets Ltd, BofA Securities, Centrum Broking Ltd, Dolat Capital Market Pvt Ltd, Edelweiss Securities Ltd, Emkay Global Financial Services Ltd, HDFC Securities Ltd, ICICI Research, ICICI Securities Ltd, IDBI Capital Market Services Ltd, JM Financial Institutional Securities Pvt Ltd, Kotak Institutional Equities, KR Choksey Research, Maybank Kim Eng Research, Motilal Oswal Securities Ltd, Narnolia Financial Advisors Ltd, Nirmal Bang Equities Pvt Ltd, Nomura Equity Research, PhillipCapital (India) Pvt Ltd, Prabhudas Lilladher Pvt Ltd, Reliance Securities, Sharekhan Ltd, Spark capital research and YES Securities (India) Ltd.




Compiled by Shivaji Jagtap, Mukesh Saroj and Sachin Khamkar 

Edited by Ramya J.S. D'Rozario


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