Most Nifty50 companies beat sales estimates
But just 19 firms record higher-than-expected profits
Companies that are part of the Nifty50 index, among India’s largest names, have largely beaten sales estimates for the March quarter of financial year 2021-22 (Q4FY22).
A total of 28 companies recorded higher revenue than what analysts had estimated, shows a May 31 note from Mumbai-based Anand Rathi Share and Stock Brokers. However, only 19 of the 50 firms made higherthan-expected profits.
The average company recorded 10.8 per cent higher sales numbers than expected. The average profit, represented by earnings per share (EPS), was 7.1 per cent lower than estimated.
The Oil and Natural Gas Corporation (ONGC) was among those recording higher revenues than expected, aided by higher crude oil prices. The State Bank of India also recorded higher growth, amid improving fundamentals. Bajaj Finserv was among those that delivered the largest earnings surprise. It had an EPS of ~85, or 88 per cent higher than analyst estimates of ~45. Grasim Industries had an EPS of ~12, which was 119.3 per cent higher than analyst estimates of around ~6.
The construction and materials sector, of which Grasim is a part, was among those that had the highest positive earnings surprise or where earnings beat estimates. Others in the sector include cement companies as well as construction major Larsen and Toubro. The segment had over 50 per cent higher EPS on average than expected.
Financial services companies also beat earnings estimates by over 30 per cent. The companies in the segment include Bajaj Finance, Bajaj Finserv, and Housing Development Finance Corporation.
Sectors that did not do as well include healthcare, telecommunications, and industrial goods and services. Healthcare earnings were lower than expected for most companies. Telecommunications saw actual earnings fall 20 per cent short of estimates. Industrial goods and services profits were 16.3 per cent lower than expectations.
Companies with a larger profit helped the overall Nifty50 EPS register growth, despite the average company in the set taking a hit. The overall Nifty EPS works out to ~218.8 for March, or 22.7 per cent higher than it was last year, according to Anand Rathi.