Nifty50’s earnings cup: Key highlights for September quarter
Nifty50.
The aggregate revenue of Nifty50 soared 9% YoY to an impressive Rs 11.38 lakh crore, accompanied by a robust 20% YoY surge in profits to Rs 1.50 lakh crore. The underlying strength of the Indian economy was further underscored by 36 out of 50 companies reporting growth in revenues, and 40 companies recording increased profits.
The standout feature of this earnings season has been the expansion of margins by 694 basis points YoY, reaching a remarkable 30.14% for the quarter. This was propelled by the strategic benefit reaped from the decline in input costs.
Sectoral Standouts:
The banking sector exhibited an in-line performance in Q2FY24 driven by advances growth and consistent enhancements in asset quality. Nevertheless, the margin trajectory faced further compression, primarily due to an increase in funding costs. While retail and MSME sectors showed strong credit growth, the corporate book also witnessed an uptick.
Deposit growth, led by term deposits, resulted in a sustained decline in the CASA ratio. At an industry level, the credit-to-deposit ratio is at its highs, and therefore the banks who will be able to demonstrate a sustained increase in deposits would be at an advantage. Nevertheless, the Net Interest Margins (NIM) are expected to see a further decline for banks with a high floating rate.
