Nifty EPS outlook for FY24 raised by 2.5% on strong Q1 results: Motilal Oswal; remains Overweight on financials, autos
₹988 on the back of robust Q1 results by corporates that could support overall bullish economic outlook for India. “We raise our FY24E Nifty EPS by 2.5% to ₹988 (earlier: ₹964) due to notable earnings upgrades in Tata Motors, JSW Steel, Bharti Airtel, SBI, and Kotak Mahindra Bank. We now expect the Nifty EPS to grow ~22% and 16% YoY in FY24 and FY25," Motilal Oswal said in a report.
After a solid 22% earnings CAGR over FY20-23, Nifty opened FY24 with a 32% earnings growth. The spread of earnings was decent with 62% of our Universe either meeting or exceeding profit expectations, it added. The earnings growth during the first quarter of FY24 was fueled by domestic cyclicals, such as BFSI and Auto.
Healthcare made a strong comeback with 24% earnings growth after six consecutive quarters of flattish earnings. Nifty posted a beat with EBITDA and PAT growth of 22% and 32% YoY, respectively as against the expectation of 18% and 25% growth BFSI coverage universe recorded a 60% YoY profit growth while Auto posted a significant profit of ₹17,900 crore as compared to a profit of ₹1,300 crore only in the year-ago quarter. Ex-Tata Motors, the Auto Universe registered a healthy 83% earnings growth in Q1FY24 versus expectation of 59%.
Also Read: PSU Banks Q1 results update: PNB, SBI lead as lenders on a strong footing, double the bottomline Oil Marketing Companies’ (OMC) profitability surged to ₹30,500 crore in the June quarter as against a loss of ₹18,500 crore, YoY, due to strong marketing margins, the report said. However, metals continued to drag the aggregates with a 40% YoY decline in earnings, led by Tata Steel (-92% YoY), Vedanta (-81% YoY), and Hindalco (-40%). IT Services companies reported weak performance in the quarter
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