Q4 earnings review: BFSI, auto lead YoY PAT beat for Nifty companies; IT, consumption top drags

As of May 4, 28 of 50 have announced their March quarter results.

Here is what these brokerages have said in their Q4 review on PAT, revenue, Earnings Before Interest, Taxes, Depreciation and Amortisation () along with the sectors that have performed well and those which have been major laggards:

ICICI Securities

According to ICICI Securities’ Q4FY24 estimates for Nifty companies which have declared their results so far, average net profit has grown at 44% YoY to Rs 76,300 crore which indicates a higher number of PAT beats led by domestic cyclicals like financials, industrials and while defensives like the and consumption have more misses. Sequentially, the PAT has grown by 8%.

Excluding financials, the PAT growth is 12% YoY at Rs 32,400 crore. On a quarter-on-quarter basis, it is 8%. These estimates pertain to 28 Nifty companies.

As for Q4FY24 revenue, a YoY growth of 8% is seen which translates to Rs 2,64,300 crore. Meanwhile, revenue has seen a 3% QoQ uptick. The Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) is seen to be at Rs 49,800 crore, a 10% YoY growth. These estimates are excluding financials.

For the Nifty Next 50 index, an estimate of 18 companies is done. The average of sales is at Rs 86,500 crore which is a 1% gain over the corresponding quarter of the previous financial year while flat over the October-December quarter. EBITDA is seen at Rs 10,100 crore, up 1% YoY and down 12% QoQ. PAT excluding financials is estimated at Rs 3,800 crore, down by 39% YoY and 24% QoQ. Meanwhile, including the financials, PAT is seen to be around Rs 7,900 crore, down by 13% YoY and 4% QoQ.

Agencies

Cyclicals and capital-intensive sectors lead in terms of beats while defensives and discretionary consumption lag Q4FY24 so far, the ICICI note said.

ICICI Sec’s 1-year forward (April 2025) target for NIFTY50 stands at 24,500 and implies a 9% upside against the long-term expected returns of 14%.

ICICI Sec’s top picks include IndusInd Bank, Utkarsh SFB, Ambuja Cements, ONGC, HPCL, GAIL, JSPL, Jindal Stainless, Solar Industries, Azad Engineering, Inox India, Suzlon, Chemplast, Kajaria, Aurobindo Pharma, Dr Lal Pathlabs, M&M, Balkrishna, Havells, Zomato and InfoEdge.

Kotak Equities

For Kotak the ongoing 4QFY24 season has hardly provided any positive surprises with earnings in line with its expectations. A few companies have delivered negative surprises though as the consumption and outsourcing stories continue to remain weak, while financials continue to exhibit strength.

Limited upgrades in earnings are in sharp contrast to elevated market expectations and rich valuations.

The Nifty-50 Index has seen a 14% YoY growth in earnings in 4QFY24 with only a handful of companies delivering strong operational beats. It noted that the sales growth remains muted on an aggregate basis, with Nifty-50 companies delivering a 9% YoY revenue growth. EBITDA grew 7.3% YoY (5.5% ex-Coal India).

Consumer staples saw tepid volume growth again but 2Ws have seen strong growth in 4QFY24. However, consumer and rural demand seems to be finally showing incipient signs of recovery. Margins continue to trend at elevated levels for most consumer companies. Banks have seen decent loan growth, modest NIM compression and stable asset quality meanwhile, IT services companies have struggled with revenue growth, even as deal wins have been strong in recent quarters.

Motilal Oswal

Earnings of the 28 Nifty companies have grown by 13% versus Motilal Oswal's expectations of 8%. The earnings growth was fueled by the domestic cyclicals, such as and Auto, as was expected with the former clocking a 22% YoY growth, while the latter reporting a growth of 38% YoY in line with estimates driven by Maruti Suzuki and Bajaj Auto.

In contrast, the aggregate performance has been dragged down by the oil & gas sector which posted a 20% earnings decline. IOCL’s profit plunged 52% YoY. Excluding metals and O&G, Nifty has recorded a 15% YoY earnings growth versus estimates of 12%.

The cement sector reported a healthy growth of 33% YoY versus estimates of +25% YoY.

HDFC Bank, Coal India, ICICI Bank, Maruti Suzuki, and TCS have contributed 75% to the incremental YoY accretion in earnings while Tech Mahindra, Reliance Industries and Wipro contributed adversely to . Only five companies within the Nifty reported profits below Motilal's expectations while 10 recorded a beat and 13 registered in-line results so far.

The sales and EBITDA of 28 Nifty companies grew 10% and 15%, respectively in 4QFY24.

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