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Informist, Thursday, Nov. 27, 2025

 

By Rajesh Gajra

 

NEW DELHI – The September quarter financial performance of the capital goods companies on the Nifty 200 index was mixed, with the aggregate net profit adjusted for exceptional items meeting analysts' expectations and the aggregate top line missing estimates. But the performance easily surpassed the Street's estimates on both net sales and adjusted net profit of the Nifty 200 index companies by a large margin.

 

The 15 capital goods companies from the Nifty 200 index reported an on-year growth of 26.8% in their aggregate net profit, excluding exceptional items, for the September quarter, which was in line with market expectations of a 26.3% growth. The aggregate net sales of these companies grew 13.2% on year, below analysts' estimate of a 15.3% growth.

 

The adjusted net profit growth of 26.8% for the 15 capital goods companies' was 2.8 times the expected 9.7% growth in the net profit of Nifty 200 companies. These 15 companies' net sales growth of 13.2% was also significantly above the index companies' net sales growth estimate of 7.8% for Jul-Sept.

 

The September quarter net profit growth of these 15 capital goods companies was the highest in eight quarters, and much higher than the 18.2% growth in the trailing quarter and 6.6% rise in the year-ago quarter. These companies' net sales growth for the September quarter was the second lowest in 10 quarters, just higher than the March quarter growth of 10.5%. These companies' top line had grown 13.4% in the trailing quarter and 15% in the year-ago quarter.

 

The financial performance of these 15 capital goods companies was considerably swayed by the engineering major Larsen & Toubro Ltd., whose consolidated net sales in the latest quarter accounted for 55% of the aggregate net sales of the 15 analysed companies. L&T's consolidated net profit for the September quarter made up 42% of the aggregate net profit of these 15 companies.

 

L&T had missed the Street's estimates on both net profit and sales for the latest quarter. It had reported a consolidated net profit growth of 16% on year for Jul-Sept, lower than the expected 20%, and a 10% growth in the consolidated revenue from operations, which was below the Street's view of a 16% growth.

 

Excluding L&T, the 14 capital goods companies saw their aggregate net profit surge 36% on year and net sales rise 17% for the September quarter. This surpassed the Street's view on both the metrics for these companies. The analysts' estimates for on-year growth in bottom line and net sales for these 14 companies were 32% and 15%, respectively.

 

Including L&T, among the 15 capital goods companies analysed, six missed the analysts' estimate on their respective net profit growth for the September quarter and nine companies surpassed it. On net sales, seven companies missed the analysts' estimates, seven surpassed them, and one company was in line with them.

 

Seven capital goods companies outperformed, and eight companies underperformed against the 26.3% net profit growth expected from these 15 companies for the September quarter. As many as 10 of these 15 companies also outperformed the Street view of 9.7% growth in net profit for the Nifty 200 index companies, while five underperformed.

 

NET PROFIT OUTPERFORMERS, LAGGARDS

Of the nine companies whose reported September quarter net profit growth surpassed the Street view on them, the net profit of Bharat Heavy Electricals Ltd. and APL Apollo Tubes Ltd. surpassed estimate by the largest margin. BHEL's net profit for the September quarter surged 3.8 times on year, surpassing analysts' estimate of a 52% rise. The state-owned company's bottom line growth benefitted from higher other income, a sharp rise in inventory gains, flat employee expenses, and a significant fall in other expenses.

 

APL Apollo Tubes' net profit for the September quarter jumped 5.6 times on year, against analysts' expectation of a 5 times growth. The company's net profit growth was helped by a subdued on-year increase of 6.4% in its consolidated cost of materials consumed, which made up 90% of its total expenses. APL Apollo Tubes reported a 9.1% on-year increase in its consolidated net sales for the September quarter.

 

On the other hand, among the six companies whose September quarter net profit missed Street's view, Rail Vikas Nigam Ltd. and Supreme Industries Ltd. missed it by the biggest margin. The net profit of Rail Vikas Nigam fell 35% on year against market expectation of a 22% growth. This was mainly due to operational expenses increasing 2.2%, higher than net sales growth of 1.3%, and due to a sharp fall in other income.

 

In the case of Supreme Industries, the company reported a 20?ll in its net profit for the September quarter, against analysts' estimate of a 4.6?cline. This was primarily on account of a muted increase of 4.1% in cost of materials consumed, as against a 5.3% net sales growth.

 

REVENUE MISSES, OUTSHINES

Apart from L&T, Premier Energies Ltd. and APL Apollo were the largest underperformers in terms of revenue growth for the September quarter, which fell short of market expectations. Premier Energies reported a 20% rise in its net sales for the latest quarter, but analysts had expected the growth to be much higher at 37%. The company's capacity utilisation in its cells segment in the September quarter increased by a slow rate to 79% from 77% in the year-ago quarter, and it was sharply lower than the near-maximum 94% utilisation in the trailing quarter.

 

APL Apollo's net sales increased only 9.1% on year, as against the Street view of a 15% growth. CG Power and Industrial Solutions Ltd., BHEL, Container Corp. of India Ltd., and Tube Investments of India Ltd. were among others which missed analysts' expectations on top line growth. Polycab India's net sales were in line with the Street's view.

 

Among the seven companies which outperformed analysts' expectations on their September quarter net sales, Astral Ltd. and Cummins India Ltd. were the most prominent. Astral reported net sales growth of 15% on year, nearly double the estimated growth of 7.7%. Astral's top line was boosted by a strong volume growth in its plumbing segment, and strong revenue growth in its paints segment.

 

In the case of Cummins India, its net sales surged 27% on year against the Street view of a 15% growth. The other outperforming companies included ABB India Ltd., Siemens Ltd., Rail Vikas Nigam, Supreme Industries, and Waaree Energies Ltd.

 

Capital goods companies are likely to continue their earnings growth momentum as seen in the September quarter, but challenges related to demand and sales will also likely persist for the remaining two quarters of the current financial year ending March 2026.

 

The following table shows the September quarter performance of the 15 companies in the capital goods sector vis-a-vis analysts' average estimate for each company as well as against the average estimates for the sector and the Nifty 200 index on the aggregate:

 

Company	PAT beat analysts' estimate	Adjusted PAT growth %	PAT growth estimate %	PAT beat sector estimate	PAT beat Nifty 200 estimate	Net sales beat analysts' estimate	Net sales growth %	Net sales growth estimate %	Net sales beat sector estimate	Net sales beat Nifty 200 estimate
Capital goods sector		26.8	26.3				13.2	15.3
Nifty 200 index		11.2	9.7				7.8	7.8
Larsen And Toubro	No	15.6	20.2	No	Yes	No	10.4	15.4	No	Yes
ABB India	Yes	-7.2	-9	No	No	Yes	13.7	10.6	No	Yes
CG Power and Industrial Solutions	No	29.8	41.5	Yes	Yes	No	21.1	28.4	Yes	Yes
Siemens	No	-7.1	-0.9	No	No	Yes	16	10.4	Yes	Yes
APL Apollo Tubes	Yes	460.4	395.5	Yes	Yes	No	9.1	14.8	No	Yes
Astral	Yes	22.5	0	No	Yes	Yes	15.1	7.7	No	Yes
Bharat Heavy Electricals	Yes	280.3	51.8	Yes	Yes	No	14.1	15.7	No	Yes
Container Corp of India	Yes	-6.8	-12.7	No	No	No	3	5.3	No	No
Cummins India	Yes	41.5	20.9	Yes	Yes	Yes	27.2	15.2	Yes	Yes
Polycab India	Yes	55.9	41.5	Yes	Yes	No	17.8	18.5	Yes	Yes
Premier Energies	Yes	71.6	53.4	Yes	Yes	No	20.3	36.5	Yes	Yes
Rail Vikas Nigam	No	-35.2	21.8	No	No	Yes	1.3	0.6	No	No
Supreme Industries	No	-20.3	-4.6	No	No	Yes	5.3	3.4	No	No
Tube Investments Of India	Yes	11.3	6.4	No	Yes	No	2.6	3.4	No	No
Waaree Energies	No	133	150.5	Yes	Yes	Yes	69.7	44.6	Yes	Yes

 

End

 

Edited by Tanima Banerjee

 

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