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Informist, Tuesday, Jan. 7, 2025

 

 

--Nuvama expects Nifty 50 Oct-Dec profit to rise 2% vs 4% growth Apr-Sept 

--Nuvama: Subdued Oct-Dec profit poses downgrade risk to estimates 

--Nuvama expects Nifty 50 Oct-Dec revenue growth at 5% 

--Nuvama expects Nifty 50 Oct-Dec revenue growth at 8% excluding oil cos 

--Nuvama sees weak profits in metals, cement, paints, FMCG 

--Nuvama sees strong PAT growth in industrials, BFSI, chemicals, internet 

 

 

MUMBAI – Brokerage firm Nuvama Institutional Equities expects the net profit of Nifty 50 companies for the December quarter to grow by 2% on year, lower than the 4% growth reported by these companies in Apr-Sept. Subdued Oct-Dec earnings will pose downgrade risks to the mid-teens growth estimate for Oct-Mar, the brokerage said.

 

The top line growth for the Nifty 50 companies, excluding oil marketing companies, is expected to be 8%. Including the oil companies, Nuvama expects revenue growth for the Nifty 50 companies to be 5% for the December quarter. The brokerage forecasts the overall recovery in revenue and net profit will be very gradual, potentially disappointing consensus estimates.

 

Nuvama said it expects metals, cement, paints, and fast-moving consumer goods companies to report weak profits for the quarter. On other hand, it expects strong net profit growth for companies in the industrial, banking, financial services, insurance, chemicals, and internet sectors.  

 

 

Nuvama said the expected revenue growth of 8% in the December quarter is a slight improvement over the 6% in Jul-Sept. The brokerage said the December quarter is likely to be the seventh straight quarter of sub-10% revenue growth for the Nifty 50 companies.

 

Exports and low-end consumption weakened in 2023-24 (Apr-Mar), and discretionary consumption and capital expenditure slowed in FY25, Nuvama said. The brokerage expects sectors such as internet, non-lending financial, jewellery and retail, to report more than 15% on-year revenue growth. It also expects industrials, chemicals, private banks, non-banking financial companies, and automobile sectors to report a moderate 10-15% revenue growth. The brokerage expects lower than 10% top line growth for companies in the information technology, FMCG, banking, metal, and cement sectors.

 

A slowdown in earnings is now being led by demand rather than external or liquidity shock, Nuvama said. The brokerage said the combination of slowing earnings, record-high valuations, and tightening liquidity needs caution, it said. Reversing this would need a significant policy response, which at present is not on the anvil, Nuvama said, adding investors needed to brace for volatility.

End

 

Reported by Akshita Kumar

Edited by Akul Nishant Akhoury

 

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