Early birds report 35% dip in Q4 net
Halfway through the extended earnings season, the Covid-19 impact was clearly visible on the 105 BSE-500 companies that had declared their fourth quarter results. The companies reported a combined 7 per cent year-on-year revenue decline and 34.7 per cent profit after tax (PAT) decline. Some analysts say the worst are yet to come.
An analysis of the 105 companies show their combined revenue during the January-March 2020 quarter fell
7 per cent to around Rs 5.20 lakh crore as against Rs 5.6 lakh crore in the January-March 2019 quarter.
The profit after tax for the above set of BSE 500 Index companies fell sharply by 34.7 per cent to Rs 33,535 crore as against Rs 51,367 crore reported during the same quarter in the previous year.
The earnings before interest, taxes, depreciation and amortisation (Ebitda) fell 13 per cent year-on-year to Rs 92,119 crore as against Rs
1,06,130 crore.
However, in the past few days, blue chips like Larsen & Toubro Infotech, Ultratech, Bharti Airtel, Cipla and Bajaj Finance delivered healthy Q4 results despite the Covid-19 related disruptions and helped improve the market sentiments.
However, there some sectors like PSU banks, housing finance, capital goods & engineering, media & entertainment and paper, to name a few, where chances of Covid-19-related performance deterioration are high.
Arafat Saiyed, assistant vice president, Reliance Securities, said, "Only around 20 per cent of results are out, that also mainly from services sectors like Consumer, Pharma, IT and Private Banks, which are not much affected by Covid-19. Going ahead we will see the results of manufacturing companies like Auto, Capital Goods,
Infra and Construction, which are more affected by the Covid-led lockdown. So we believe worst results are yet to come in next few weeks."
Rating agency Crisil expects high
Covid-19 impact on the paper industry while India Ratings expects severe negative impact of the Covidrelated shutdown on the media & entertainment industry.
"The extended lockdown to stem the Covid-19 pandemic has dealt a nasty blow to the highly fragmented paper industry in India. Problem is,
40-45 per cent of paper mills are in
Covid-19 red zones and another 40-45 per cent in orange zones. Demand has fallen sharply, consequently, the financials of paper makers, especially the small- and mid-sized ones will be materially affected," Crisil Research said.
India Ratings and Research believes that print media, broadcasters and movie exhibitors would be the most impacted by the Covid-19 led lockdown. On the other hand, multiple system operators (MSOs), broadband players and electronic media may remain relatively resilient.