After 32% earnings growth in Q1, Motilal raises Nifty EPS estimate by 2.5%

economictimes.indiatimes.com:

Nifty EPS estimate by 2.5% to Rs 988 from an earlier estimate of Rs 964 due to notable earnings upgrades in Tata Motors, JSW Steel, Bharti Airtel, SBI,and Kotak Mahindra Bank. The brokerage now expects the Nifty EPS to grow 22%/16% YoY in FY24/ FY25. Stating corporate earnings for 1QFY24 came in strong and could underpin the underlying overall optimistic narrative of India, brokerage firm Motilal Oswal said, «After a solid 23% earnings CAGR over FY20-23, Nifty posted 32% earnings growth in 1QFY24, a beat vs our expectations of 25%.

MOFSL Coverage Universe recorded the highest earnings growth in the last eight quarters, fueled by domestic cyclical such as BFSI and Auto. Healthcare has made a strong comeback with 24% earnings growth after six consecutive quarters of flattish earnings.» In Q1 FY24, of the 21 sectors under Motilal's coverage, 7/8/6 sectors reported profits above/in line/below its estimates. Of the 231 companies under the brokerage firm coverage, 84 exceeded profit estimates, 87 posted a miss, and 60 were in line.

«Earnings performances of both MOFSL Universe and Nifty were led by heavyweights. The top five companies within MOFSL Universe contributed 84% to the incremental YoY accretion in earnings (three OMCs contributed 59%, followed by SBI – 13% and Tata Motors – 12%). Similarly, within Nifty, five companies (BPCL, SBI, Tata Motors, HDFC Bank, and ICICI Bank) contributed 100% to the incremental YoY accretion in earnings during the quarter,» it said.