“Miss in heavyweights such as
, TTMT and OMCs’ like , drove the
aggregate miss. However, the spread of earnings has been decent, with 68 per cent of
the MOFSL Universe either meeting or exceeding our profit expectations. 14 out
of 20 sectors have met/beaten expectations,” Motilal said in a report.
It said like the Q4 of FY22, profit in Q1 of FY23 was entirely driven by BFSI, aided by a moderation in credit cost. “O&G dragged the aggregates while consumer, metals and cement have beaten expectations. Metals, healthcare, and cement reported an earnings decline YoY, while IT earnings were flat in 1QFY23.”
said Nifty EPS in the June quarter came in at Rs 177 per share, down 14 per cent QoQ. “Major disappointment came in from the oil & gas sector wherein marketing margins came in lower than estimated. However, capital goods, metals and mining and pharma space surprised on the positive side,” it said.
The recent cool off in key commodity prices viz. metals, crude, among others, is seen as a breather for global equity markets, which are currently wary of ongoing geopolitical issues and interest rate hikes by central banks to control inflation.
Profit for Nifty companies rose 23 per cent YoY against the estimation of 31 per cent, led by BFSI. “Excluding BFSI, profit grew 18 per cent YoY (est. 28 per cent). Heavyweights, such as RIL, TTMT, SBIN,
, and BPCL posted a weaker-than-expected performance, thus weighing on the Nifty’s earnings. On a three year basis, over 1QFY20-1QFY23, MOSL/Nifty earnings have posted a 16/20 per cent CAGR,” Motilal said.
Of the 215 companies tracked by the coverage, 100 exceeded estimates, 68 delivered a miss, and 47 were in line on the PAT front.
“We have cut our FY23 Nifty EPS estimate by 2.7 per cent to Rs 843 (earlier: Rs 866) due to notable earnings downgrades in
, RIL, BPCL, and TTMT. We now expect the Nifty EPS to grow by 15/18 per cent in FY23/FY24,” it said.
For Motilal, the top earnings upgrades are
(21 per cent), (13 per cent), (11 per cent), (8 per cent), and UPL (8 per cent) while the top downgrades: BPCL (-70 per cent), (-62 per cent), ONGC (-21 per cent), (-17 per cent), and (-15 per cent).
ICICI Securities sees Nifty earnings growing at a CAGR of 13.3 per cent over FY22-24E. “We now value Nifty at 19,425 i.e. 21x PE on FY24E EPS of Rs 925 wherein we marginally increase our PE multiple to 21x vs. 20x earlier,” it said.
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