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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————–  
AUTO        
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.  
         
BANK        
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.      —
Total662,439166,369132812  
         
CEMENT        
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
Total153,20012,808(11)(9)2942  
         
CHEMICAL        
UPL +85,8265,4281022710(1)18,229      —
Total85,8265,4281022710(1)  
         
ENGINEERING – CAPITAL GOODS       
L&T +319,49913,969(10)(45)5036127,619      —
Total319,49913,969(10)(45)50361  
         
FINANCE        
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
Total226,53455,78212(20)9(7)  
         
FMCG        
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      —
Total293,36863,5315(8)1321  
         
IT        
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
Total1,063,145189,6253328  
         
Jewellery        
Titan Co37,403919(16)(71)101     N.A.2,052Oct 28
Total37,403919(16)(71)101     N.A.  
         
METAL        
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      —
Total2,389,168131,828(22)(32)38(9)  
         
PHARMA        
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      —
Total188,42127,5601(8)429,988  
         
POWER & ENERGY        
NTPC 249,38230,99110(5)62577,423      —
Coal India +210,50427,6593(21)143336,413      —
Power Grid95,55229,029101564783,887      —
Total555,43887,6787(6)934  
         
TELECOM        
Bharti Airtel +244,9181,40316     N.A.2     N.A.104,384Oct 27
Total244,9181,40316     N.A.2     N.A.  
         
PAINT        
Asian Paints +49,4496,660(2)(19)6920510,436Oct 22
Total49,4496,660(2)(19)69205  
         
PORTS        
Adani Ports and SEZ +28,75110,0012(5)253218,038      —
Total28,75110,0012(5)2532  
         
Nifty Total8,172,504815,891(6)1328110  

 

EARNINGS DECLARED SO FAR

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

 

Note: 
+ 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 direct.com 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.

 

End

 

Compiled by Shivaji Jagtap, Mukesh Saroj and Sachin Khamkar 

Edited by Ramya J.S. D'Rozario

 

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This copy was first published on the Cogencis WorkStation

© Cogencis Information Services Ltd. 2020. All rights reserved.

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