Q1 Earnings Preview: Flat to 4% growth in net profit expected from Nifty pack; auto, financials, health to outperform
Kotak Institutional Equities and Motilal Oswal Financial Services (MOFSL).
While Kotak sees Nifty universe to report flat (0.6%) earnings on a YoY basis, MOFSL estimates a 4% uptick in the net profit for the reporting quarter.
Excluding global commodities, i.e. oil & gas and metals, the Nifty universe is expected to report a 10% YoY jump, Motial Oswal said in a preview note. Meanwhile, Kotak pegs net income YoY growth at 9.3%, excluding the OMCs.
BFSI and auto companies are expected to continue their dominance while contributions from healthcare and metals could improve in 1QFY25, MOFSL said. Banks and NBFC lending would mainly lead BFSI’s earnings, with 14% and 17% YoY growth, respectively, it said.
Within banks, the earnings growth of private and PSU banks is estimated at 16% and 11% YoY, respectively, though it will be the lowest in over 10 quarters for private banks and over eight quarters for PSU banks, the report said.
Meanwhile, the auto sector’s earnings are likely to rise 18% YoY, which will also be the lowest in nine quarters. Notwithstanding this, the auto sector will be among the best performers within the MOFSL coverage sectors once again.
Sales and EBITDA for Nifty are likely to improve 6% and 4% YoY, respectively, while excluding OMC’s, EBITDA of the Nifty is likely to grow 8% YoY.
Conversely, the EBITDA margin for the Nifty-50, excluding financials, is likely to contract 80bp YoY to 20.1% during the quarter.
Kotak report estimates Q1FY2025 sales growth at 7.3% YoY. The sales and net profit
