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Informist, Wednesday, Apr. 16, 2025

 

By Anjana Therese Antony

 

MUMBAI – The earnings growth of India's top companies has crawled in the first three quarters of 2024-25 (Apr-Mar), and is likely to continue with the same momentum through the final quarter, too. Chances are the Nifty 50 universe will see a further slowdown in growth during the March quarter, and this will result in a series of earnings downgrades due to mounting uncertainty about the ongoing tariff war and its impact on corporate earnings.

 

In terms of stock valuations, the narrative has changed in a matter of a few weeks, with some analysts saying these stocks are not trading at cheap levels if one looks at the rising risks due to US tariffs, weak earnings expectations, and high interest rates.

 

Analysts expect earnings downgrades to continue as any major respite is unlikely due to lack of earnings growth for India's top listed players and with tariff-related worries still looming. While the direct impact of US tariffs on India is limited, the indirect impact is likely to be sweeping, given that about two-thirds of Nifty 50 companies' top line is directly or indirectly linked to global trade, Nuvama Institutional Equities said in its earnings preview report for the March quarter.

 

The aggregate net profit of 47 companies in the Nifty 50 is expected to decline 5% on year to INR 1.875 trillion, according to an Informist poll of 30 broking firms. Earnings estimates for Adani Enterprises and Bajaj Finserv are excluded from this analysis as no earnings estimates are available for these companies. Tata Consultancy Services is also excluded as the company already released its earnings on Thursday.

 

A weak performance by heavyweight sectors such as banking, financial services, and insurance--which has a 44% weightage in the Nifty 50--is likely to pull down the bottom line growth, JM Financial Services said in its strategy report. An expected decline in domestic cyclicals such as automobiles and commodity-linked sectors will add to the problem, though the latter could see limited impact, broking firms said.

 

The cumulative revenue of these 47 companies is likely to grow 5% on year to INR 14.350 trillion, as per the poll. "While top line has been subdued in both FY24 and FY25, the mix is different," Nuvama said in its report. While there was weakness in exports and low-end consumption in FY24, FY25 saw a slowdown in BFSI, discretionary consumption, and capital expenditure, the broking firm said. It added that weak top lines were now weighing on margins. The on-quarter growth figures of the two key earnings metrics are likely to draw a similar picture, with the bottom line seen falling 3% while the top line is expected to rise 4%, as per the poll.

 

The revenue of all the 50 companies had risen 6.2% in the December quarter and the net profit excluding exceptional items had increased 3.9%. Sequentially, the top line had expanded 4.3% and the bottom line had grown 2.7%.

 

The slowdown in domestic earnings growth and worries about global geopolitics were evident from the aggressive selling pressure from foreign investors since October. As a result, the Nifty 50 index fell over 16% from the record high it had hit in September 2024. The month of October last year saw the highest-ever FPI outflows of nearly $11 billion, according to  data from the National Securities Depository Ltd. In Jan-Mar, foreign portfolio investors net sold $13.54 billion of Indian equities, compared to a net purchase of $1.36 billion in the year-ago quarter.

 

TOP SCORERS

While heavyweights are likely to take a back seat in terms of earnings growth, a better performance is anticipated in the March quarter by companies in the financial services, metals, and pharma sectors. Financial services players are expected to see double-digit growth in both earnings metrics in the quarter as net interest margin levels are providing some comfort, unlike their banking peers. "While breathers in the pockets of stress (such as unsecured loans and microfinance) are positive, we do not expect management commentary on the macro environment for lending to be encouraging," Kotak Institutional Equities said in a report. The total net profit of four finance companies in the Nifty 50, excluding Bajaj Finserv, is expected to rise 15% on year to INR 80.30 billion and their top line is seen increasing 12% to INR 658.61 billion.

 

Pharmaceuticals companies are expected to perform better than most others, supported by stability in prices of generics in the US market, volume growth, and continued benefits from new launches in the previous few quarters, broking firms said. The aggregate net profit of three pharma companies in the Nifty 50 is likely to rise 9% on year to INR 53.64 billion and revenue is seen rising 12% to INR 283.08 billion, according to the poll.

 

A rise in steel prices and a fall in input costs are likely to make metals players the top performers in the reporting quarter in terms of net profit growth. The cumulative net profit of the top three metal companies is likely to grow 47% on year to INR 74.52 billion. While the bottom line is expected to skyrocket, these companies' revenue is likely to rise just 1% to INR 1.618 trillion, as per estimates. While the revenue of Hindalco Industries is likely to rise 10%, that of JSW Steel and Tata Steel is seen falling 3% and 6%, respectively.

 

Despite the expectation of a strong performance, IDBI Capital Markets & Securities said it had a 'neutral' view about the metals sector as expensive valuations are likely to limit the upside. Domestic steel prices increased by INR 5,300 per tonne during the quarter, driven by the 12% provisional safeguard duty the government had announced, IDBI Capital Markets said in its pre-earnings report. The broking firm also said average coking coal prices fell 13% in Jan-Mar and domestic iron ore prices declined 1%.

 

LAGGARDS

A fall in the overall bottom line likely awaits banking, automobile, and oil and gas companies in the Nifty 50 universe. Banking, the heavyweight sector in the Nifty 50, is likely to post weak results amid lower loan growth and persistent pressure on net interest margins. The aggregate net profit of six major banks is expected to fall 8% on year to INR 565.12 billion and the top line is seen rising 5% to INR 1.214 trillion, as per the poll. While five banks are expected to report net profits, only IndusInd Bank is expected to report a net loss of nearly INR 2 billion compared to a net profit of INR 23.47 billion a year ago. Excluding IndusInd Bank, the sector's net profit is seen falling 4%, while revenue is expected to grow 6%. 

 

As per the analysis of the provisional business updates shared by banks for the March quarter, credit growth has moderated mainly on account of stress built up in unsecured loans and the Reserve Bank of India's increased regulatory oversight in the recent past, Nirmal Bang Institutional Equities said in a report. The broking firm also noted that deposit growth remains a challenge  as it is up only 10.3% on year, with most of the growth coming from term deposits.

 

In automobiles, the second-biggest sector in terms of revenue, a likely 58?ll in heavyweight Tata Motors Ltd.'s consolidated net profit is expected to drag down the bottom line of the sector. The sector is also expected to witness contraction in operating margins, largely due to a fall in operating leverage, higher raw material costs, and an increase in competition in the passenger vehicles segment.

 

The net profit of the top six auto players is expected to fall 34% on year to INR 180.16 billion in the March quarter, while revenue is seen rising 6% to INR 2.209 trillion. If Tata Motors is excluded, both earnings metrics would be better, with the bottom line of the sector seen up 8% on year and revenue seen rising 11%.

 

Lack of any major change in the macroeconomic environment is likely to keep the growth of information technology companies stagnant. The net profit of the top four IT companies yet to declare their earnings is likely to be unchanged at INR 154.21 billion and revenue is seen rising 7% to INR 1.083 trillion. This was reflected in the results of IT behemoth Tata Consultancy Services Ltd. released on Thursday, with the company's revenue up only 5% on year and net profit down nearly 2% due to higher costs. Though the company sounded optimistic about FY26 compared to FY25, the stock fell slightly on Friday and was among the very few Nifty 50 constituents to have closed lower. On Tuesday, the stock closed less than 1% higher at INR 3,248.20 on the National Stock Exchange. 

 

Muted earnings growth is also expected in the case of fast-moving consumer goods companies amid weak urban consumption trends, while rural demand is showing a gradual improvement. Most FMCG categories showed sluggish sales growth, while the beverages segment saw an uptick ahead of the summer season, according to Elara Securities. The five FMCG players in the Nifty 50 are likely to see no growth in their net profit of INR 90.89 billion and revenue is seen rising just 1% to INR 463.75 billion.

 

Following are the Jan-Mar consensus earnings estimates of companies that constitute the National Stock Exchange's Nifty 50 index. These estimates are based on reports compiled by Informist Media from 30 brokerages.

 

Company	Net sales (INR million)	Net profit (INR million)	Net sales Y-o-Y % Change	Net profit Y-o-Y % Change	Net sales Q-o-Q % Change	Net profit Q-o-Q % Change	EBITDA	Earnings date	No. of brokerages polled
	Estimated
	Net Sales	Net Profit
AUTO
Bajaj Auto	119,683	20,288	4	5	(-)7	(-)4	23,792	--	12
Eicher Motors +	52,011	12,358	22	15	5	6	13,155	--	10
Hero MotoCorp	97,495	11,061	2	9	(-)5	(-)8	13,904	--	8
M&M	302,479	24,273	19	21	(-)2	(-)18	41,573	--	8
Maruti Suzuki	411,601	38,994	8	1	7	11	49,674	Apr 25	13
Tata Motors +	1,225,255	73,184	2	(-)58	8	34	164,271	--	9
Total	2,208,523	180,157	6	(-)34	5	10
BANK
AXIS Bank *	142,263	67,135	9	(-)6	5	6	N.A.	--	17
HDFC Bank *	313,470	171,071	8	4	2	2	N.A.	Apr 19	16
ICICI Bank *	208,440	117,913	9	10	2	0	N.A.	Apr 19	16
IndusInd Bank*	47,623	(-)1,919	(-)11	N.A.	(-)9	N.A.	N.A.	--	17
Kotak Mahindra *	74,137	35,802	7	(-)13	3	8	N.A.	--	14
SBI *	428,116	175,123	3	(-)15	3	4	N.A.	--	15
Total	1,214,049	565,123	5	(-)8	2	0
CEMENT
Grasim Industries	86,470	(-)1,325	28	N.A.	6	N.A.	3,383	--	4
UltraTech Cement +	225,615	25,699	10	14	31	75	44,879	Apr 28	13
Total	312,085	24,375	15	34	23	87
CHEMICAL
Asian Paints +	85,897	10,624	(-)2	(-)15	0	(-)4	15,643	May 08	13
Total	85,897	10,624	(-)2	(-)15	0	(-)4
DIVERSIFIED
Adani Enterprises +			N.A.	N.A.	N.A.	N.A.	N.A.	--	--
Total	0	0	N.A.	N.A.	N.A.	N.A.
ENGINEERING - CAPITAL GOODS
L&T +	759,480	47,327	13	8	17	41	80,725	--	7
Total	759,480	47,327	13	8	17	41
FINANCE
Bajaj Finance +*	105,206	44,495	31	16	12	5	N.A.	Apr 29	11
Bajaj Finserv +	N.A.	N.A.	N.A.	N.A.	N.A.	N.A.	N.A.	Apr 29	--
HDFC Life Insurance Co#	241,610	5,500	18	34	44	33	N.A.	Apr 17	2
SBI Life Insurance Co#	253,400	8,600	1	6	2	56	N.A.	Apr 24	1
Shriram Finance*	58,396	21,704	15	12	4	-39	N.A.	Apr 25	11
Total	658,611	80,299	12	15	16	-9
FMCG
Britannia Industries +	43,720	5,199	7	(-)3	(-)5	(-)11	7,624	--	15
Hindustan Unilever	147,229	24,768	(-)1	3	(-)4	(-)17	35,722	Apr 24	15
ITC	172,482	49,108	(-)3	(-)2	(-)6	(-)13	60,411	--	14
Nestle India	54,808	8,701	4	(-)7	15	25	13,099	Apr 24	13
Tata Consumer Product +	45,513	3,115	16	44	2	12	5,980	--	12
Total	463,753	90,891	1	0	(-)2	(-)11
HEALTHCARE
Apollo Hospitals Enterprise +	55,900	3,687	13	45	1	(-)1	7,679	--	8
Total	55,900	3,687	13	45	1	(-)1
IT
HCL Tech +	302,664	43,520	6	9	1	(-)5	64,972	Apr 22	20
Infosys +	419,681	66,671	11	(-)16	0	(-)2	98,881	Apr 17	19
Tech Mahindra +	134,361	10,634	4	61	1	8	18,365	Apr 24	20
Wipro +	226,379	33,379	2	18	1	0	46,909	Apr 16	19
Total	1,083,086	154,205	7	0	1	(-)2
JEWELLERY
Titan Co	124,199	8,200	10	4	(-)23	(-)17	12,892	--	6
Total	124,199	8,200	10	4	(-)23	(-)17
METAL
Hindalco Industries +	6,17,165	45,582	10	44	6	22	83,989	May 20	11
JSW Steel +	4,46,643	18,310	-3	41	8	155	63,733	May 23	15
Tata Steel +	5,53,748	10,629	-6	74	3	225	64,274	--	14
Total	16,17,555	74,521	1	47	5	56
OIL & GAS
BPCL	1,113,514	26,595	(-)4	(-)37	(-)2	(-)43	54,074	--	9
ONGC	3,36,960	85,831	(-)3	(-)13	0	4	183,466	--	9
Reliance Ind +	2,396,873	183,566	1	(-)3	0	(-)1	434,177	--	10
Total	3,847,347	295,993	(-)1	(-)10	(-)1	(-)6
PHARMA
Cipla +	67,699	10,288	10	10	(-)4	(-)34	16,300	May 13	11
Dr. Reddy's Lab +	83,274	14,623	17	12	(-)1	3	22,247	May 09	11
Sun Pharma +	132,104	28,728	10	8	(-)3	(-)1	36,397	--	11
Total	283,077	53,640	12	9	(-)3	(-)9
POWER & ENERGY
Bharat Electronics	89,599	18,011	5	1	56	37	22,883	--	8
Coal India +	365,513	80,201	(-)2	(-)8	2	(-)6	100,197	--	12
NTPC	452,169	55,452	6	0	9	18	125,660	--	7
Power Grid	118,184	43,287	7	5	17	11	101,391	--	6
Total	1,025,466	196,951	3	(-)2	10	7
TELECOM
Bharti Airtel +	486,524	58,130	29	181	8	(-)61	2,66,417	--	8
Total	486,524	58,130	29	181	8	(-)61
PORTS
Adani Ports and SEZ +	82,030	27,865	19	37	3	11	49,754	--	5
Total	82,030	27,865	19	37	3	11
RETAIL
Trent	42,796	3,396	34	(-)48	(-)6	(-)28	6,701	--	7
Total	42,796	3,396	34	(-)48	(-)6	(-)28
Nifty Total	14,350,378	1,875,383	5	(-)5	4	(-)3

 

 

EARNINGS DECLARED SO FAR

Company	Sales (INR million)	Informist estimates, sales (INR million)	PAT (INR million)	Informist estimates, PAT (INR million)	EPS  (INR)	Result   date
TCS +	644,790	647,354	122,240	125,628	33.79	Apr 10

 

Notes:
+ Consolidated Figure
* Net interest Income
Y-o-Y: Year-on-Year
# Net premium income
Q-o-Q: Quarter-on-Quarter
N.A.: Not Available
 
Estimates from:
Anand Rathi Share and Stock Brokers Ltd, Antique Stock Broking Ltd, Axis Securities Ltd, Centrum Broking Ltd, Choice Equity Broking Pvt Ltd, Dolat Capital Market Pvt Ltd, Elara Securities (India) Pvt Ltd, Emkay Global Financial Services Ltd, Equirus Securities Pvt Ltd, HDFC Securities Ltd, HSBC Global Research, ICICI Securities Ltd, IDBI Capital Market Services Ltd, IIFL Capital Services Ltd, InCred Research Services Pvt Ltd, Indsec Securities and Finance Ltd, JM Financial Institutional Securities Pvt Ltd, Kotak Institutional Equities, KR Choksey Research, Morgan Stanley, Motilal Oswal Financial Services Ltd, Nirmal Bang Equities Pvt Ltd, Nomura Equity Research, Nuvama Wealth Management Ltd, PhillipCapital (India) Pvt Ltd, Prabhudas Lilladher Pvt Ltd, Sharekhan Ltd, Systematix Shares and Stocks (India) Ltd and YES Securities (India) Ltd. 

 

End

 

Edited by Avishek Dutta

 

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