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Informist, Monday, Jul. 7, 2025

 

NEW DELHI – The aggregate bottom-line growth of Nifty 50 companies are expected at 4.1% on year for the June quarter, adjusted for one-time items, said Kotak Institutional Equities in a report Monday. Their top line is expected to grow only 2.8%, a multi-quarter low, it said.

 

Sequentially, the top line is expected to contract 7.4% and bottom line is expected to fall 6%. This forecast does not include data from Adani Enterprises Ltd., Bajaj Finserv Ltd., Jio Financial Services Ltd., and Kotak Mahindra Bank Ltd. Revenue and profit of Nifty 50 companies had grown 6.9% and 3.7% on year, respectively, in the March quarter.

 

The brokerage expects companies involved in capital goods, construction material, metals and mining, retailing and telecommunication services to report a profit growth exceeding 20% on year for the June quarter. However, it expects companies involved in automobiles and components, internet software and services, and transportation to report a contraction in their bottom line. 

 

Kotak Institutional Equities expects the top line of construction materials, internet software and services, telecommunication services sectors to report a revenue growth exceeding 20% for the latest quarter. Top line of automobile and components companies, electric utilites, metals and mining, and oil, gas and consumable fuels are expected to contract, according to the brokerage. 

 

The earnings before interest, taxes, depreciation, and amortisation of the Nifty 50 companies are expected to grow 4.8% on year in the June quarter, much lower than the 9.2% registered in the March quarter, but much higher than the 2.8% reported in the year-ago quarter. Their EBITDA margin for the latest quarter is expected to be 22%, higher than the 21% in the March quarter and 21.3% in the base quarter.

 

SECTORAL OUTLOOK

Automobile and components companies' revenue growth are expected to be restricted by low mid-single digit on-year growth in two-wheeler, passenger vehicle and commercial vehicle volume. Kotak Institutional Equities expects companies with exposure to global automotive market to report weak numbers as production volumes likely declined.

 

Lenders are expected to report lower slippages from unsecured loans and microfinance institutions for the June quarter, with a favourable asset quality outlook. While the net interest margins of certain banks are expected to fall 10-15 basis points sequentially, public banks are expected to face a higher impact in the latest quarter, and private banks in the September quarter.

 

Net income of oil marketing companies are expected to rise sharply in the June quarter driven by higher gross refining margins and strong marketing margins, Kotak said.

 

Construction materials companies are expected to see an improvement in their realisation on account of price hikes. Higer footfalls in existing beds, addition of new beds, and a slight increase in the average revenue per occupied bed are expected to benefit companies offering healthcare services.

Kotak Institutional Equities expects solar capacity additions to support the earnings of renewable energy companies. A strong on-year growth in revenue is expected for telecommunication companies due to higher average revenue per user in the quarter-ended June.  End

 

Reported by Anand JC

Edited by Akul Nishant Akhoury

 

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