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Informist, Thursday, Jun. 5, 2025

 

By Anjana Therese Antony

 

MUMBAI – Market watchers have characterised the March quarter earnings season as "muted" and "not a surprise", but the reality is a bit more complicated than that. While the financial results of India's top listed companies beat the Street's expectations, their collective net profit fell for the first time in 10 quarters, something the stock market seems to have glossed over, focused as it is on the possibility of better earnings in the next few quarters and the country's long-term prospects.

 

"The Indian market remains blissfully ignorant of the reality of a sluggish domestic outlook with likely continued weakness in consumption demand and likely slowdown in investment demand and a challenged global macro environment with likely low growth and possibly high inflation," Kotak Institutional Equities said in its strategy report Sunday. The modest operating performance of most sectors and companies and muted commentary from managements preclude a strong recovery in credit, consumption, or investment demand in the near term, the broking firm said.

 

The cumulative net profit for the quarter, excluding exceptional items, of India's top 48 large-cap companies fell 0.8% on year to INR 2.123 trillion, according to Informist's analysis. While the fall was far less than 5% projected by Informist's poll of 30 brokerages, it was still the worst showing in 10 quarters. If one were to include exceptional items, the bottom line would have risen 7% to INR 2.245 trillion, much better than what the Street had forecast.

 

The cumulative top line, too, fared better than expected, growing 6% on year to INR 15.191 trillion, compared with the 5% growth projected in the Informist poll. This was also largely consistent with the growth posted by these companies a quarter ago as well as a year ago.

 

Adani Enterprises and Bajaj Finserv have not been included in this analysis as no brokerage estimates were available for these two companies. If the duo had been included in the calculations, the bottom line of the Nifty 50 universe would have fallen 1.2%, while the top-line growth would have remained around the 6% mark.

 

While analysts said many companies succeeded in reducing their costs, which largely cushioned the fall in their net profit, higher input costs and muted demand continued to weigh on the earnings. The aggregate expenditure of these 50 companies increased over 5% on year to INR 13.815 trillion. This, however, was softer than the near 8% rise seen a year ago.

 

TOP SCORERS

Only two sectors--basic industries and energy--managed to beat expectations for both net profit and revenue. The rest were a mixed bag, with some beating the views on net profit while failing to meet sales expectations, or vice-versa. The bottom lines of major sectors such as banking, consumer goods, energy, pharmaceuticals, and automobiles fell from the year-ago quarter even as their top lines grew.

 

The net profit of six Nifty 50 companies in the basic industries sector, which includes metal, cement, and capital goods companies, rose almost 29% on year, beating the expectation of 17% growth. Their aggregate revenue increased 6%, slightly higher than the estimate of over 5% growth. Resumption of construction activities and slowdown in cheaper steel imports helped the financial performance of these companies during the quarter.

 

The bottom line of seven energy companies in the Nifty 50 was also better than expected, with their total net profit falling more than 5%, against the estimated fall of 9%. Heavyweights Reliance Industries and Bharat Petroleum Corp., which together contribute to 70% of the sector’s revenue, beat the Street’s projections by wide margins. Growth across business segments boosted RIL’s financials, while BPCL benefited from cheaper Russian crude oil.

 

Bharti Airtel, one of the two telecommunications players in the Nifty 50 along with Reliance Industries, parent of Reliance Jio Infocomm Ltd., also performed better than expectations, thanks to the one-time exceptional gain of INR 42.33 billion on account of deferred tax benefits and the increase in tariffs in July.

 

STRAGGLERS

While banks also reported results that were slightly better than anticipated on the back of improved asset quality and stable net interest margins, the weakness in the bottom line continued. India’s top six banks together reported a fall of almost 7% on year in net profit, only slightly better than the projected fall of 8.5%. On the other hand, their top line grew 4%, slightly below estimates. The top-line estimates were skewed, however, by a projected 43?ll in IndusInd Bank's revenue. The actual fall was only 15%.

 

Similar was the case with the seven automobile companies in the Nifty 50 universe. Their aggregate bottom line fall of 24% was better than the Street’s projection of a 31?cline, but it was still steep enough to make some broking firms take a cautious view on the sector. Their revenue growth of almost 6% was largely in line with expectations. Various brokerages anticipate weak urban demand trends and a likely slowdown in exports to continue to hurt the sector in the medium term.

 

Muted demand was also a dampener for India's top information technology and consumer goods players. The bottom line of six consumer goods companies in the Nifty 50--five fast-moving consumer goods companies and Titan Co. Ltd.--fell 6%, deeper than the forecast of a 2?ll, while revenue grew almost 10%, beating the anticipated rise of 7%. However, market participants expect the projected above-normal monsoon and the government's push to drive consumption to boost the sector's growth in the medium term.

 

The five IT giants together saw their net profit growing just 1.5%, slightly better than the 0.5% projected, but the 5% revenue growth failed to meet the forecast of 6% for the sector. IT companies earn more than half their revenue from the US and this exposure has led to some earnings downgrades following the quarterly results. 

 

The five pharmaceutical and healthcare players in the Nifty 50 saw muted growth in bottom line for the quarter, while the cumulative top line nearly met expectations. The net profit of these companies taken together rose over 1% on year, against the 2?ll that had been predicted. However, the 8% growth in revenue was slightly lower than the 9% rise expected. While the growth in the generics segment of pharmaceutical companies remains robust, analysts said litigation risks are likely for some companies, along with the potential risks from US tariffs.

 

Even though the managements of some Nifty 50 constituents with substantial exports businesses said they do not expect a major direct hit from US tariffs in the financial year 2025-26 (Apr-Mar), some analysts said the uncertainty is likely to persist. The initial ripple effects of US President Donald Trump’s tariffs were evident in the outlook comments of India’s IT companies during the post-earnings conference calls with analysts. While many said no major project cancellation or other similar impact from tariffs is likely at least in the current fiscal, research analysts remain cautious, particularly on the IT sector, given its significant exposure to the US.

 

However, all the market participants Informist spoke to held a bullish view on India’s long-term growth. Foreign investors have once again started increasing their exposure to India in the past couple of months and the domestic market is considered one of the strongest among emerging markets. 

 

Following are the Jan-Mar earnings figures and estimates of 48 of the companies that constitute the National Stock Exchange's Nifty 50 index:
 

Company Name	PAT Actual	PAT Expected	PAT Growth Actual	PAT Growth Expected YoY	Sales Actual	Sales Expected	Sales Growth Actual	Sales Growth Expected
	(in INR million)		(in % YoY)		(in INR million)		(in % YoY)
AUTO
Bajaj Auto	20,493	20,177	5.85	4.22	1,21,480	1,19,402	5.78	3.97
Eicher Motors	13,622	12,172	27.25	13.71	52,411	51,901	23.15	21.95
Hero MotoCorp	10,809	10,953	6.39	7.80	99,387	97,431	4.41	2.35
Mahindra & Mahindra	24,371	24,697	21.85	23.48	3,16,087	3,04,348	24.28	19.66
Maruti Suzuki India	37,111	38,576	-4.30	-0.52	4,06,738	4,10,845	6.38	7.45
Tata Motors	90,360	71,995	-48.35	-58.85	11,95,030	12,21,325	0.39	2.60
Total	196,766	178,570	-28.18	-34.82	2,191,132	2,205,251	5.36	6.04
BANK
Axis Bank	71,175	66,988	-0.17	-6.04	138,105	142,063	5.51	8.54
HDFC Bank	176,161	171,071	6.69	3.60	320,658	313,470	10.28	7.81
ICICI Bank	126,296	117,913	17.95	10.12	211,929	208,440	11.00	9.17
Indusind Bank	-22,360	-4,124	N.A.	N.A.	30,483	45,529	-43.30	-15.32
Kotak Mahindra Bank	35,517	35,656	-14.07	-13.74	72,836	74,109	5.42	7.26
State Bank of India	186,426	175,704	-9.93	-15.11	427,746	427,991	2.69	2.75
Total	573,216	563,207	-6.84	-8.46	1,201,758	1,211,602	4.32	5.17
CEMENT
Ultratech Cement	24,914	25,507	6.92	9.47	230,633	226,699	12.95	11.02
Total	24,914	25,507	6.92	9.47	230,633	226,699	12.95	11.02
CHEMICAL
Asian Paints	8,751	10,624	-30.37	-15.46	83,589	85,897	-4.26	-1.62
Grasim Industries	-1,740	-1,325	N.A.	N.A.	89,258	86,470	31.89	27.77
Total	7,011	9,299	-54.22	-39.28	172,847	172,367	11.53	11.22
ENGINEERING - CAPITAL GOODS
Bharat Electronics	21,048	17,389	18.01	-2.50	91,197	89,085	6.93	4.45
Larsen & Toubro	50,225	48,138	16.73	11.88	743,923	764,668	10.90	14.00
Total	71,273	65,527	17.11	7.67	835,120	853,752	10.46	12.92
FINANCE
Bajaj Finance	44,796	44,495	17.13	16.34	98,072	105,206	23.65	31.29
HDFC Life Insurance Co.	4,765	5,500	15.76	33.61	237,656	241,610	16.00	17.93
SBI Life Insurance Co.	8,135	8,600	0.33	6.07	238,607	253,400	-5.00	0.89
Shriram Finance	21,394	21,704	9.95	11.54	60,512	58,396	20.78	9.44
Total	79,090	80,299	13.10	14.83	634,846	658,611	7.69	11.72
FMCG
Britannia Industries	5,600	5,199	4.03	-3.42	44,322	43,720	8.92	7.44
Hindustan Unilever	25,160	24,768	3.84	2.22	152,140	147,229	2.40	-0.90
ITC	43,821	49,108	-12.75	-2.18	172,482	172,482	9.63	9.63
Nestle India	8,854	8,701	-4.19	-5.85	55,039	54,808	4.49	4.05
Tata Consumer Products	2,995	3,115	-30.73	-27.97	46,082	45,513	17.35	15.90
Total	86,430	90,891	-7.46	-2.69	470,065	463,753	7.19	5.75
HEALTHCARE
Apollo Hospitals Enterprise	3,896	3,639	53.51	43.39	55,922	55,846	13.11	12.96
Total	3,896	3,639	53.51	43.39	55,922	55,846	13.11	12.96
IT
HCL Technologies	43,070	43,520	8.05	9.18	3,02,460	302,664	6.13	6.20
Infosys	70,330	66,671	-11.75	-16.34	4,09,250	419,681	7.92	10.67
Tata Consultancy Services	122,240	125,904	-1.69	1.26	6,44,790	647,742	5.29	5.78
Tech Mahindra	11,667	10,634	76.51	60.87	1,33,840	134,361	3.98	4.39
Wipro	35,696	33,379	25.93	17.76	2,25,042	226,379	1.33	1.93
Total	283,003	280,109	1.49	0.45	1,715,382	1,730,828	5.41	6.36
JEWELLERY
Titan Co.	8,700	8,200	10.69	4.33	134,770	124,199	19.72	10.33
Total	8,700	8,200	10.69	4.33	134,770	124,199	19.72	10.33
METAL
Hindalco Industries	52,770	45,582	66.26	43.61	648,900	617,165	15.89	10.22
JSW Steel	15,470	17,983	19.09	38.44	448,190	447,260	-3.13	-3.33
Tata Steel	16,894	10,780	40.09	-10.61	562,181	554,720	-4.21	-5.48
Total	85,134	74,346	49.91	30.91	1,659,271	1,619,144	3.09	0.60
OIL & GAS
Bharat Petroleum Corp.	49,880	26,595	-17.17	-55.84	1,111,790	1,113,514	-4.61	-4.46
Oil and Natural Gas Corp.	64,483	85,831	-34.66	-13.03	349,822	3,36,960	1.00	-2.72
Reliance Industries	194,070	183,566	2.41	-3.14	2,613,880	2,396,873	10.51	1.33
Total	308,433	295,993	-11.48	-15.05	4,075,492	3,847,347	5.11	-0.77
PHARMA
Cipla	12,218	10,376	30.12	10.50	67,297	67,726	9.19	9.89
Dr. Reddy's Laboratories	15,933	14,543	21.64	11.03	85,284	83,394	19.89	17.23
Sun Pharmaceutical Industries	25,156	28,886	-8.87	4.64	129,588	132,750	8.14	10.78
Total	53,308	53,805	6.42	7.41	282,169	283,870	11.71	12.38
POWER & ENERGY
Coal India	96,040	80,201	12.04	-6.44	378,245	365,513	-1.02	-4.35
NTPC	57,781	55,452	22.37	17.44	439,037	452,169	3.21	6.30
Power Grid Corp. of India	43,362	43,287	5.05	4.87	109,826	118,184	-0.62	6.95
Total	197,183	178,940	13.18	2.71	927,107	935,867	0.99	1.94
TELECOM
Bharti Airtel	111,619	58,130	146.56	28.40	478,762	486,524	27.33	29.40
Total	111,619	58,130	146.56	28.40	478,762	486,524	27.33	29.40
PORTS
Adani Ports and Special Economic Zone	30,386	27,865	25.91	15.46	84,884	82,030	23.08	18.94
Total	30,386	27,865	25.91	15.46	84,884	82,030	23.08	18.94
RETAIL
Trent	3,499	3,396	215.44	206.13	41,061	42,796	28.84	34.29
Total	3,499	3,396	215.44	206.13	41,061	42,796	28.84	34.29
Grand Total	2,123,861	1,997,723	-0.82	-6.71	15,191,222	15,000,486	6.24	4.91

 

End

 

Data compiled by Vinod Bhovad

Edited by Rajeev Pai

 

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