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Informist, Friday, Oct. 17, 2025

 

By Rajesh Gajra

 

NEW DELHI - Companies in the basic industries sector are likely to have gathered pace in their combined on-year earnings and revenue performance in the September quarter, as compared to the trailing quarter, amid better volumes, stable prices, and lower or benign costs. The likely superlative performance, however, hinges upon the largest companies in sub-sectors such as metals, capital goods, and cement, which are seen reporting strong growth in their bottom line.

 

There will likely be an improvement in the companies' earnings in the September quarter over the June quarter. The quarter-on-quarter aggregate net profit and revenue growth of the sector, however, will likely be in low single digits. But it will be better than the June quarter, which saw a sequential fall on both these counts.

 

The basic industries sector covers the capital goods, metals, cement, and real estate sub-sectors. These mostly have a large exposure to the domestic market and economy but with a notable share of exports and international operations for select companies within the sector. The constant tugs and pulls of macroeconomic conditions in India and around the world have resulted in a mixed impact on the basic industries sector's earnings performance. The September quarter is not expected to be any different.

 

As per an average of estimates from 20 brokerages, the aggregate net profit of 40 companies from the basic industries sector that are part of the Nifty 200 index is likely to have risen sharply by 26% on year in the September quarter, while their aggregate year-on-year revenue growth is expected to be 10%. This expected on-year performance of the sector is notably better than the June quarter when the reported aggregate net profit, excluding exceptional items, of the same set of companies was up 19% on year and the revenue had increased 8%.

 

Of the 40 basic industries companies in the Nifty 200, 31 are expected to report an increase in their net profit for the September quarter, seven are expected to report a fall in net profit, and two are expected to report flat profit growth. This, if it materialised, will be a substantial improvement over the September quarter of 2024, when only 22 of these 40 companies had reported an increase in net profit and 18 had reported a fall in profit.

 

The same scenario is seen in top line growth. As many as 36 of these 40 companies are expected to report an increase in revenue in the September quarter, up from 27 in the year-ago quarter. Only two companies are likely to report a fall in revenue in the reporting quarter, down significantly from 11 companies that had reported a fall in revenue in the year-ago quarter. The remaining two companies are expected to report flat revenue, the same as the year-ago quarter.

 

Four large companies – Larsen & Toubro Ltd., Tata Steel Ltd., Hindalco Industries Ltd., and UltraTech Cement Ltd. – account for 34% of the estimated aggregate net profit and 47% of the estimated aggregate revenue. These four companies are the largest in their respective sub-sectors — capital goods, ferrous metals, non-ferrous metals, and cement.

 

Excluding these four companies, the estimated aggregate net profit growth on a year-on-year basis of basic industries companies for the September quarter is only 19%, much lower than the overall profit growth of 26%, including the above four giants. The estimated aggregate revenue growth of the group, without these four companies, is 9.6%, only slightly down from 10.4% including these four.

 

The largest capital goods company, Larsen & Toubro, whose estimated revenue accounts for 16% of the aggregate estimated revenue for the basic industries sector for the September quarter, is seen reporting a 15% on-year rise in consolidated revenue and a 20% rise in consolidated net profit. The largest steel manufacturer in the country, Tata Steel, whose share in aggregate revenue estimate is 12%, is seen reporting a consolidated revenue growth of 2.6% on year and a consolidated net profit growth of 3.4 times in the September quarter. Tata Steel's base period included significant exceptional items and after excluding these items, the company's consolidated net profit growth is likely to be 2.4 times.

 

The largest aluminium producer, Hindalco Industries, an Aditya Birla group company which has a share of 15% in aggregate revenue estimate for the sector, will likely report a 14% on-year rise in consolidated revenue and a 15% increase in consolidated net profit. Another Aditya Birla group company, UltraTech Cement, which is the largest cement maker in the country, is seen reporting an 18% rise in consolidated revenue while its consolidated net profit may jump 79%. UltraTech Cement's estimated revenue accounts for 4.1% of aggregate revenue estimate for the basic industries sector.

 

Among the rest of the companies in the sector, steel tubes and pipes manufacturer APL Apollo Tubes Ltd. is seen reporting the highest on-year increase in net profit at 4.9 times, according to an average of estimates by four brokerages. On the other hand, Steel Authority of India Ltd.'s net profit is seen falling 67% on year, the worst expected net profit change among all companies in the sector.

 

On top line performance, Premier Energies Ltd. is seen reporting a substantial growth of 37% on year, whereas National Aluminium Co. Ltd.'s revenue is seen declining 2.7% on year, the worst revenue performance among the sector companies.

 

In the capital goods sub-sector, companies are seen grappling with mixed trends in government capital expenditure, given their reliance on contracts from government and public sector companies. Government capex grew 40% on year in Jul-Aug whereas public sector companies' capex declined around 14% on year, YES Securities said in a report. Private capex orders, excluding those from power generation and distribution companies, are likely to have been tepid, Nuvama Wealth Management said in a report.

 

In the September quarter, companies from the metals sub-sector are expected to benefit from higher sales realisations and lower input costs as compared to the year-ago quarter. Higher commodity prices will drive the top line of non-steel metal companies, while steel companies will benefit from strong volume growth on year.

 

In the case of the real estate sub-sector, analysts expect steady growth in the September quarter after a strong performance in the trailing quarter. Sustenance will likely have driven pre-sales momentum in the September quarter, HDFC Securities said in a report.

 

Following are the Jul-Sept earnings estimates from 20 brokerage firms for the 40 companies of the basic industries sector that are a part of the Nifty 200 index:

 

Company name	Sales, INR million	PAT, INR million	Sales YoY Change %	PAT YpY Change %	Sales QpQ Change %	PAT QoQ Change %
ABB India	32,168	3,971	10.5	-9.8	1.3	12.8
ACC +	52,478	2,954	13.7	47.9	-13.8	-21.3
Ambuja Cements +	91,547	5,995	21.8	31.5	-11.0	-19.8
APL Apollo Tubes +	54,871	2,658	14.9	394.0	6.1	12.1
Astral +	14,764	1,100	7.7	-0.0	8.5	35.6
Bharat Dynamics	7,004	1,489	28.6	21.5	182.5	711.2
Bharat Electronics	53,152	11,095	16.0	1.7	20.3	14.5
BHEL	76,180	1,467	15.7	51.8	38.8	N.A.
CG Power and Industrial Solutions +	30,969	3,126	28.4	41.5	7.6	16.1
Cochin Shipyard	12,019	1,921	9.6	-0.5	23.0	2.3
Container Corp	24,039	3,530	5.3	-4.9	11.8	37.0
Cummins India	28,601	5,380	14.8	19.4	-1.6	-1.3
DLF +	23,374	9,700	18.3	-29.8	-14.0	27.2
Godrej Properties +	10,982	3,601	0.5	7.4	152.7	-40.0
Hindalco Industries +	662,451	45,012	13.8	15.1	3.1	12.4
Hindustan Aeronautics	65,498	16,494	9.6	11.1	35.9	19.8
Hindustan Zinc	83,293	24,933	1.1	8.5	7.9	13.1
IRB Infrastructure Developers +	17,307	1,207	9.1	20.8	-17.5	-40.4
Jindal Steel +	110,758	6,051	-1.2	-29.7	-9.9	-59.5
JSW Steel +	444,972	17,117	12.1	119.2	3.1	-21.6
L&T +	708,966	40,873	15.2	20.4	11.3	13.0
Lodha Developers +	31,902	5,972	21.5	41.2	-8.6	-11.5
Mazagon Dock Shipbuilders +	30,876	6,767	12.0	15.7	17.6	49.7
National Aluminium Co	38,953	10,227	-2.7	-3.7	2.3	-3.9
NMDC	59,724	16,614	24.3	30.9	-10.0	-15.6
Oberoi Realty +	15,125	6,206	14.6	5.3	53.2	47.3
Phoenix Mills +	10,371	3,250	13.0	49.0	8.8	35.0
Polycab India +	65,075	6,217	18.4	41.3	10.2	5.0
Premier Energies +	20,842	3,160	36.5	53.4	14.5	2.7
Prestige Estates +	25,281	2,089	9.7	8.7	9.6	-28.6
Rail Vikas Nigam	48,971	3,684	0.6	21.8	24.8	188.2
Shree Cement	43,519	3,875	16.8	316.1	-12.0	-37.3
Siemens	49,210	5,173	23.8	11.0	27.2	40.1
Steel Authority of India	254,712	2,780	3.2	-66.6	-1.7	-59.4
Supreme Industries +	23,493	1,970	3.4	-4.6	-10.0	-2.6
Tata Steel +	553,291	28,062	2.6	244.2	4.0	27.0
Tube Investments of India	21,342	1,786	3.4	6.4	12.8	6.3
UltraTech Cement +	184,119	14,666	17.8	78.8	-13.5	-34.1
Vedanta +	381,571	35,849	1.4	44.3	0.9	12.6
Waaree Energies +	51,703	9,061	44.6	150.5	16.8	21.6
Total	4,515,474	377,081	10.4	26.2	3.9	3.1

 

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., Centrum Broking Ltd., Dolat Capital Market Pvt. Ltd., Elara Securities (India) Pvt. Ltd., Emkay Global Financial Services Ltd., HDFC Securities Ltd., HSBC Global Research, ICICI Securities Ltd., IIFL Capital Services Ltd., JM Financial Institutional Securities Pvt. Ltd., Kotak Institutional Equities, Motilal Oswal Financial Services Ltd., Nirmal Bang Equities Pvt. Ltd., Nomura Equity Research, Nuvama Wealth Management Ltd., Prabhudas Lilladher Pvt. Ltd., Sharekhan Ltd., Systematix Shares and Stocks (India) Ltd. and YES Securities (India) Ltd.

 

End

 

Edited by Tanima Banerjee

 

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