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Informist, Friday, Jul. 11, 2025

By Anand JC

NEW DELHI – The net profits and revenues of 21 companies in the transport sector, part of the Nifty 200 index, are expected to contract year-on-year and sequentially for the June quarter, mainly led by weakness in the automobile and aviation sectors, according to analyst estimates culled out from 13 brokerage reports.

The automobile sector is expected to report a moderate growth in its top line due to a scant 2% on-year growth in wholesale sales volume in the latest quarter. Two-wheeler companies' aggregate volumes grew 1% in this period, while commercial vehicle despatches fell 2%, Motilal Oswal Financial Services said in a report. Tractors remained outliers, with a 9% on-year growth.

The automobile components makers' revenue is expected to grow nearly 7% in the June quarter despite moderate growth in overall automobile despatches and production, Kotak Institutional Equities said in a report. Their bottom lines are expected to gain from the mid-to-high-single-digit growth in replacement segment volumes, Kotak said.

The brokerage firm expects the volume growth of infrastructure companies to be impacted by a decline in volumes of iron ore, coking coal, and fertilisers at ports. Volumes at ports in April and May grew only 3.5% on year.

However, port operators are expected to outperform surface transporters in the quarter ended June. Demand was likely low for business-to-business and business-to-consumer surface transportation due to seasonality in the business and high competitive intensity, according to Elara Securities. While logistics activity has picked up recently domestically, elevated fuel prices and higher toll charges weighed on companies' transportation costs, Motilal Oswal said.

The road sector witnessed a lull in the June quarter, according to Nuvama Institutional Equities. They expect companies to report a contraction in revenues due to a decline in order inflows and an early onset of monsoon. Railway companies may perform relatively better, driven by strong metro coach orders and wagon orders in the trailing quarter.

India's aviation sector endured a volatile June quarter due to the two domestic and international geopolitical conflicts – India and Pakistan, and Israel and Iran. May aviation traffic grew just 1.9% on year to 14.1 million passengers, the lowest in recent quarters, according to Prabhudas Lilladher.

FINANCIALS

Estimates showed the 21 companies' aggregate net profit in the June quarter is expected to fall over 18% on year and 28% on quarter. Tata Motors Ltd. is expected to report the sharpest contraction in net profit while that of Bharat Forge Ltd., Mahindra & Mahindra Ltd., and TVS Motor Co. Ltd. could record the highest gain year on year.

The 21 companies' aggregate revenue for the latest quarter is expected to decline 11% on year and nearly 19% sequentially. Escorts Kubota Ltd., Hero MotoCorp. Ltd., Hyundai Motor India Ltd., Ola Electric Mobility Ltd., Sona BLW Precision Forgings Ltd., and Tata Motors are all likely to report a fall in their top lines for the June quarter.

As many as five of the 21 companies – Escorts Kubota, Hero MotoCorp, Hyundai Motor, Sona BLW Precision Forgings, and Tata Motors-- are likely to report a fall in both their net profits and revenues for the latest quarter.

Tata Motors likely fared poorly compared to its peers in the reporting quarter, dragged down by a 6% on-year decline in its wholesale sales and flattish increase in average selling price of its cars, Kotak Equities said. Volume of its Jaguar Land Rover business, which contributes over 70% to its consolidated top line, likely fell 12% on year in the June quarter due to weakness in China and the impact of US' tariffs.

The automotive giant's subsidiary is also expected to face sharp margin pressure amid ongoing global headwinds while its standalone business' profitability was likely affected by higher input costs, bigger discounts, and weak demand.

Financials of Ola Electric, too, could be among the worst in the transport sector. The company's revenue is expected to plummet 58% on year, and it will likely report a loss again. The company has also been consistently losing its market share in the electric two-wheeler market to legacy players.

InterGlobe Aviation, which runs budget carrier IndiGo, could be another outlier in the transport sector. Passenger traffic fell in the June quarter, given the ongoing international geopolitical turmoil. Average daily international passengers declined to 100,000 in June from 113,000 in May and 118,000 in April, ICICI Securities said in a report citing daily data reported by the Ministry of Civil Aviation.

The brokerage is "constructive" on Interglobe Aviation despite a weak June quarter for the aviation sector. This is partly due to the company's systemic business position, which gained strength at the cost of its peers like Air India. Despite these issues, the company is expected to have carried 10% more passengers in the latest quarter, ICICI Securities said. However, its profit is expected to fall over 11% on year in the June quarter, while revenue could grow 8% on year.

Following are the Apr-Jun earnings estimates for transport companies part of Nifty 200 based on reports from as many as 13 brokerage firms:

Notes:

+ Consolidated Figure

Y-o-Y: Year-on-Year

Q-o-Q: Quarter-on-Quarter

End

US$1 = INR 85.80

Edited by Deepshikha Bhardwaj

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