Tata Consultancy Services (TCS), the country’s largest exporter of software services, will start the earnings season for the fourth quarter ended March 2024 on April 12.
Experts expect moderate top line and profit growth due to the base effect. They also observed that the revenue growth of India Inc. moderates while diminishing returns on raw material are already factored in.
Deepak Jasani, Head of Retail Research at HDFC Securities pointed out that in Q4FY24, we have a modest base of top line growth and a normal base of PAT growth. With this in mind, moderate top line and profit growth is expected.
He added that marginal tailwinds are likely to diminish due to a high base. In Jasani’s view, auto, cement, retail, capital goods, OMC (oil marketing companies), banks, NBFCs and healthcare may report strong earnings growth driven by volume and operating leverage. On the other hand, IT, chemical, agrochemical, FMCG and metals may report moderate or weak earnings.
Read all the news about Q4 results here
Motilal Oswal Financial Services expects Nifty earnings to grow 6 percent year-on-year (YoY).
Marginal tailwinds are likely to narrow due to a high base. EBITDA margin (ex-Finance) could remain flat for the Nifty at 19.8 percent (up 10 bps).
“Revenue growth is expected to be driven, once again, by domestic cyclicals, such as auto and BFSI, which are expected to post 20 percent and 15 percent growth YoY, respectively. Conversely, earnings growth is expected to be weighed down by global cyclicals, such as oil and gas and metals, which are expected to decline by 6 percent and 12 percent respectively,” said Motilal Oswal.
The brokerage firm believes healthcare (+33 percent) and cement (+32 percent) can report robust YoY revenue growth. Consumer goods (+7 percent), capital goods (+5 percent), and technology (+4 percent) may report moderate YoY growth.
“Our FY24 Nifty EPS (earnings per share) remains stable at ₹980, while the FY25 EPS witnessed a reduction of 1 percent to ₹1,132. We expect the Nifty EPS to grow 21% and 16% in FY24 and FY25, respectively,” said Motilal Oswal.
Kotak Institutional Equities expects Q4FY24 net profits of the BSE-30 index to increase 5 percent YoY and 8 percent QoQ and for the Nifty 50 Index to increase 4 percent YoY and 7 percent QoQ.
“We estimate EPS of the BSE-30 index at ₹3,121 for FY24 and ₹3,551 for FY25 and of the Nifty-50 index at ₹989 for FY24 and ₹1,088 for FY25,” Kotak said.
Also Read: Q4 results: Big caps may yield some surprises in FY25
Experts believe the banking sector may report mixed numbers amid net interest margin (NIM) pressure, and steady loan growth but softer deposit growth and cost pressures. PSU Banks can report better numbers than private banks.
Also Read: Banking sector Q4 preview: PSU Banks to continue to post better revenue growth than private banks, says Elara
The IT sector, which has struggled in the recent past, may report weak numbers for Q4FY24.
The large-cap IT services players may report modest revenue growth in Q4FY24 due to continued muted demand trends due to weak discretionary spending by customers amid an uncertain global macroeconomic situation.
Also Read: Q4 results preview: IT sector likely to report muted revenue growth with stable margins; all eyes on FY25 guidance
Disclaimer: The views and recommendations above are those of individual analysts, experts and second-hand companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 09 Apr 2024, 08:49 IST