'Companies are coming to the campuses, and we have companies booking their slots for the placement season, but the overall number of companies signing is low, and the hiring numbers are also lower.'
Notwithstanding the robust turnaround in the financial performance for the June quarter (Q1FY24), stocks of state-run oil marketing companies have been in a downtrend in the last month. The fall comes on a rise in crude oil prices that have surged to a 7-month high of $88 a barrel. A busy political calendar in the months ahead that may see the government keep a lid on auto fuel prices is also a dampener, analysts said. Shares of Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Indian Oil (IOC) have shed 9-11 per cent since their respective earnings announcement between July 26 to August 4.
The country's gross domestic product (GDP) is expected to grow at around 18.5 per cent with an upward bias in the first quarter of the current financial year, according to SBI research report Ecowrap. This estimate is lower than the Reserve Bank of India's GDP growth projection of 21.4 per cent for the April-June quarter. "Based on our 'Nowcasting' model, the forecasted GDP growth for Q1 FY22 would be around 18.5 per cent (with upward bias)," the report said. Higher growth in Q1 FY22 is mainly on account of a low base.
The growth in the contact-intensive portion of the economy trailed our expectation, highlighting how imperative it is for confidence to improve, either through accelerated vaccinations or otherwise, to drive a sustainable recovery in these sectors, asserts Aditi Nayar.
While most analysts are expecting poor results from oil marketing companies (OMCs) in the first quarter of 2024-25 (Q1FY25) and even in the first half (H1) of FY25, GAIL (India) could be an outlier. Upstream producers, Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) could do well due to strong crude and gas prices, but refiners are likely to see weak margins and the impact of frozen prices during the election period will also be negative.
The recent surge in crude oil prices could shave off the gains made by India Inc in profit margins in the past few quarters. Worse, it comes at a time when consumer demand in the country is slipping and major global economies are witnessing a slowdown. A back-of-the-envelope calculation suggests that the margin expansion accounted for three-fourths of the rise in the listed firms' operating profit between the April-June quarter (Q1) of FY23 and Q1FY24, and only a quarter of profits gains came from revenue growth.
'The overall market cycle is very positive.'
Cement companies witnessed speculative support from investors through FY23 amid hopes of a rebound. After capex announcements in the FY24 Budget, there was further interest due to expectations that government expenditure would boost earnings, besides a generic macro-recovery. Cement earnings were under pressure in FY22 and FY23 due to high raw material and fuel costs; muted demand prevented them passing on the higher cost.
Riding on strong June-quarter numbers and positive brokerage outlook, the stock of retail major Trent hit a fresh all-time high on Monday (August 14). The stock has gained 14 per cent in five trading sessions. Continuing the trend of strong revenue growth over the last few quarters, the company posted 53.5 per cent year-on-year (Y-o-Y) growth in top line to Rs 2,536 crore in the June quarter (first quarter of financial year 2023-24 or Q1FY24).
Corporate earnings grew in double digits during the April-June 2022 (Q1FY23) quarter but the momentum waned. Overall corporate earnings in the quarter were down sharply from their highs in FY22. The combined net profit of 2,981 listed companies across sectors in the Business Standard sample was up 22.4 per cent YoY to Rs 2.24 trillion in the June quarter, driven by a big jump in the earnings of banks, non-banking lenders, oil & producers, and FMCG companies. Also, earnings in the corresponding quarter a year ago were affected because of the second wave of the Covid pandemic, even though the numbers were a lot better than Q1FY21 when there was a nationwide lockdown.
After some enforced slowdown in offtake during April-May 2024 due to elections, the cement sector is looking at a possible demand rebound which may help it to push up prices. The April'24 offtake was muted while May'24 saw some improvement with a likely 5-6 per cent rise in demand month-on-month (MoM). In June, some price hikes seem to have been taken, which suggests more sustained improvement in demand.
The sectors that received most of the investment during this period included manufacturing, financial services, business services, computer services, electricity, and other energy sectors.
The April-June quarter (Q1) of the current financial year (FY25) may be soft for banks with loan growth moderation, net interest margin (NIM) pressures, and higher staff and credit costs inching up, according to analysts. Credit growth could ease due to the lagged impact of the Reserve Bank of India (RBI) tightening and deposit growth has weakened, and the current account and savings account (CASA) ratio has declined 10-370 basis points (bps) quarter-on-quarter (Q-o-Q) for many banks.
MMFS is looking at a compounded annual growth rate (CAGR) of 18 per cent in assets under management (AUM) during FY23 to FY26 on the back of the strong recovery. The company has initiated risk-mitigating initiatives, including diversification into non-vehicle loans, building digital capacity and re-classification of customer profiles into affluent and mass-affluent in semi-urban segments to better target marketing.
SBI Cards and Payment Services reported numbers that met Street expectations in the first quarter of the 2023-24 financial year (Q1FY24). The net profit came in at Rs 590 crore, while pre-provision operating profit grew 17 per cent year-on-year (YoY) (a little better than expectations). But provisions were hiked due to surprise stress from pre-Covid-19 period of 2018-19, and that dragged earnings.
Better than expected performance in June quarter of the 2023-24 financial year (Q1FY24) and a robust outlook led to 1.2 per cent gain in Titan Company stock on Friday (July 7). The firm reported 20 per cent growth in revenues, aided by double-digit rise in its major consumer segments. Jewellery, its largest segment, accounting for about 90 per cent of its sales, stood out with a growth of 21 per cent over the year ago quarter.
These stocks offer the best combination of maximum 'buy' recommendations from brokerages and share price upside over the next 12 months.
The Colgate-Palmolive (India) stock gained 2.3 per cent in trade on Friday, and ended at Rs 2,079 per share. This was on the back of a robust operating performance in the July-September quarter of 2023-24 (Q2FY24) and expectations of gradual sales recovery going ahead. While the stock is up 44 per cent from its lows in January this year, further gains will depend on its ability to sustain higher growth rates.
Tata Power declared encouraging results for the April-June quarter (Q1) of the 2023-23 financial year (FY24). The firm's revenue rose 5 per cent year-on-year (Y-o-Y) to Rs 15,210 crore. It was driven by higher sales to distribution companies (discoms) and capacity addition in renewables. Company's adjusted profit after tax (PAT) rose 3 per cent to Rs 906 crore with reported PAT at Rs 1,100 crore on a one-time gain of Rs 235 crore.
Despite enduring a weak first quarter of the 2023-24 financial year (Q1FY24), Power Grid Corporation (PGCIL) has laid out an ambitious capex plan going forward. It is looking to invest around Rs 1.8 trillion on an existing asset base of Rs 2.7 trillion to aim at keeping over 50 per cent market share in the transmission market. This includes opportunities from the Rs 2.4 trillion green energy corridor.
Equity valuations are once again on the rise, after they cooled down in the second half of 2021 and the first half of 2022. The BSE Sensex trailing price-to-earnings (P/E) multiple has risen to a 17-month high of nearly 25x, from 23.7x at the end of December 2022 and 21.6x at the end of June 2022. Similarly, the index closed on Friday with a trailing price-to-book (P/B) value ratio of 3.6x, up from 3.4x at the end of December 2022; it is the highest since December 2021.
Notwithstanding the fact that the country's pharmaceutical (pharma) pricing regulator has allowed a 12 per cent price increase for medicines listed under the National List of Essential Medicines (NLEM) in 2023, analysts and industry insiders predict that the overall domestic pharma industry will only witness a price hike of 5-6 per cent. This is attributed to higher competitive intensity in the market. Krishnakumar V, executive director and chief operating officer (CEO) of Eris Lifesciences, a domestic-focused pharma company, noted that the NLEM segment experienced growth suppression of around 150 basis points due to price reductions during the January to July period this year.
Housing sales in seven major cities rose 5 per cent annually to about 1.2 lakh units during the April-June period, while demand fell 8 per cent from the preceding quarter on surge in prices, according to Anarock. Real estate consultant Anarock, which is one of the leading housing brokerage firm, on Thursday released the data of housing market for the current April-June quarter. In April-June 2024, housing sales across seven major cities are estimated at 120,340 units, up 5 per cent from 115,090 units in the year-ago period.
While the current headcount reduction has more to do with slowing demand, the rise of artificial intelligence will impact jobs in the future.
The GDP growth is estimated to come at the "deceptively high" level of 20 per cent for the April-June 2021 quarter but is far below the same in the pre-COVID times, rating agency Icra said on Wednesday. Icra said the low base of the last year, when the GDP had contracted by close to 24 per cent, "conceals" the impact of the second wave of COVID-19 infections. Economic activity is boosted by robust government capital expenditure, merchandise exports and demand from the farm sector, it said, estimating the GDP to grow by 20 per cent and the gross value added (GVA) will register a growth of 17 per cent for the June quarter.
The stock of LTIMindtree finished at Rs 5,001 a piece on Monday, which means it is down about 5 per cent from its all-time high as its June quarter results for the 2023-24 financial year (Q1FY24) missed estimates. A cautious note by the management, coupled with the fact that it will miss its double digit revenue growth target for FY24 weighed on the stock price. The company delivered revenues of just over a billion dollars in the quarter with constant currency growth of 0.1 per cent.
The Street shrugged off a muted first quarter of financial year 2023-24 (Q1FY24) and a cautious near-term outlook by India's largest information technology (IT) services company, Tata Consultancy Services (TCS). The stock was the top Nifty50 and Sensex gainer on Thursday, rising 2.5 per cent, as investors took comfort from a robust order book and an encouraging pipeline. Like its larger peer, HCL Technologies' (HCL Tech), too fell short of the Street's expectations on the revenue and margin fronts given cuts in discretionary expenditure.
IT services company Wipro on Thursday reported a 12 per cent rise in its consolidated net profit to about Rs 2,870 crore for the June 2023 quarter. It had posted a consolidated net profit of Rs 2,563.6 crore in the year-ago period (Q1FY23). Wipro's income from operations in the June quarter increased 6 per cent to Rs 22,831 crore.
The Monetary Policy Committee (MPC) is expected to maintain the status quo on policy rates for the fourth consecutive time in its October 4-6 review meeting. The incremental information available since its last meeting in August suggests that growth and inflation prints for the second quarter (Q2) of financial year 2023-24 (FY24) will exceed the committee's projections. However, the Consumer Price Index (CPI)-based inflation is expected to moderate in the second half (H2) of FY24.
Power Grid Corporation of India (PGCIL) was one of the top Sensex gainers in trade on Monday, ending with gains of nearly 9 per cent. The stock has gained about 42 per cent year-to-date. For the March quarter, the company reported a revenue of Rs 12,000 crore, which was down 3 per cent year-on-year (Y-o-Y) but up 4 per cent quarter-on-quarter (Q-o-Q). The drop was on account of one-time arrears related to the Nagapattinam tariff bid competitive bidding (TBCB) project in Q4 FY23.
Corporate earnings got a big boost from the fall in commodity and energy prices in July-September 2023 (Q2FY24) despite a slowdown in revenue growth during the quarter. The combined net profits of 3,123 firms that have declared their results so far were up 38 per cent year-on-year (Y-o-Y) to Rs 3.07 trillion in Q2FY24, up from Rs 2.24 trillion a year ago. Earnings were, however, down 3.5 per cent on a sequential basis from Rs 3.18 trillion in April-June (Q1) FY24.
Notwithstanding lower growth rates recorded in the first quarter (Q1) of 2023-24 (FY24), which spanned from April to June, footwear stocks have seen some gains in the past two trading sessions. Bata India saw an increase of approximately 5 per cent, driven by positive expectations surrounding a potential tie-up in the sports/athleisure segment. This development is viewed favourably due to the segment's higher growth rates.
Except for Westlife Foodworld (Westlife), a weak 2022-23 (FY23) January-March (fourth quarter, or Q4) quarter performance and a muted near-term outlook led to a downward revision of earnings estimates for quick-service restaurant (QSR) players. Brokerages have slashed estimates by as much as 10 per cent for 2023-24 (FY24) and 2024-25 (FY25). The downward revisions have weighed on the performance of listed players, who have underperformed the market with low single-digit returns over the past month.
Though retail investors accounted for a larger number of outstanding shares of the NSE-listed companies at 15.29 per cent, the combined value of their holding was Rs 9.16 trillion. This was much lower than the value of holding of FPIs and DIIs.
Marico's January-March quarter (Q4) results were slightly better than consensus. Revenue was up by 1.7 per cent year-on-year (Y-o-Y) to Rs 2,280 crore. Ebitda grew by 12.5 per cent Y-o-Y to Rs 440 crore. Adjusted PAT was up 10.3 per cent Y-o-Y to Rs 320 crore.
Even as the slowdown in the information technology (IT) services sector deepens, banking, financial services and insurance (BFSI), as well as oil and gas companies, emerge as the primary drivers of corporate earnings in the country. The IT services sector's share in corporate earnings declined to a five-year low of 17.4 per cent in the second quarter (Q2) of 2023-24 (FY24), whereas banks and finance companies accounted for 46.5 per cent, and oil and gas firms contributed 16.8 per cent. At their peak, IT services firms like Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro represented just over a third of the combined net profit of all listed companies in the Business Standard sample.
Industrial metals (ferrous and non-ferrous) suffered great volatility once the Ukraine War began in February 2022. First, there was a sharp price rise due to fears of supply disruption, followed by weak global demand. China's weakness and rolling lockdowns have hit production and demand.
Industrial base metals major Hindalco delivered a strong consolidated performance during the January-March quarter (Q4) of FY24. Consolidated revenue was reported at Rs 56,000 crore, up 6 per cent quarter-on-quarter or Q-o-Q (flat year-on-year or Y-o-Y), with better realisation and higher India volumes.
Since its results for the first quarter of the 2023-24 financial year (Q1FY24) earlier this month, the stock of auto component major Bharat Forge is up nearly 15 per cent and hit its all-time high in the process. The recent gains have extended the returns over the last three months to over 34 per cent. After a strong Q1 performance which beat expectations, brokerages had revised their earnings estimates upwards to factor in the improved outlook.
After the hit of the pandemic, India Inc is now worried about the adverse impact of inflation and higher commodity prices on their revenues and margins. The inflation scare is the strongest among manufacturers of consumer goods such as automobiles, consumer durables, and fast-moving capital goods (FMCG). Companies across sectors fear they will not be able to pass on the hike in input costs to their consumers due to weak demand, which, in turn, would lead to a hit on margins and profitability in the forthcoming quarters.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances