Tata Steel, HDFC Bank, Maruti, Hindalco among 11 Nifty cos seen clocking over 20% profit growth in Q1

July 09,2024

With the Q1 earnings season set to kick start this week, a couple of brokerages see Nifty50 constituents reporting a flattish to 6 per cent growth in combined profit for the quarter on a similar rise in sales, expecting higher earnings from companies in BFSI and automobile spaces. In total, 11 of 50 Nifty constituents may log over 20 per cent growth in profit, said Motilal Oswal Financial Services (MOFSL). 

"With the Nifty50 up 10 per cent YTD and broader indices up even more, valuation has been inching up across the board. With a healthy earnings growth already priced in, any significant disappointment and change in outlook could lead to a derating," said Elara Securities. 

MOFSL expects Tata Steel to clock the highest profit growth among Nifty constituents at 79.4 per cent, followed by Divis Labs (43.7 per cent YoY), Hindalco Industries (up 42.4 per cent) and Maruti Suzuki India (up 37.9 per cent).

For Tata Steel, Kotak Institutional Equities sees profit rising 118 per cent YoY to Rs 877.40 crore. It expects Tata Steel's Europe business to report Ebitda loss of $29 per tonne led by higher costs in UK end-of-life assets. This brokerage sees Divis' Q1 profit rising 60.5 per cent YoY to Rs 571.50 crore. PL sees Hindalco's profit at Rs 65.20 per cent YoY to Rs 5,500 crore, saying the average 15 per cent rise in LME alumina prices would benefit India operations amid flattish operating cost. 

MOFSL sees Maruti Suzuki India's Q1 profit at Rs 3,400 crore, up 37.9 per cent.

Hero MotoCorp (up 31.6 per cent) and Bajaj Auto (up 20 per cent) are two other automobile makers that are expected to log over 20 per cent profit growth in Q1. Among Nifty banks, analysts expect HDFC Bank to report 28-30 per cent year-on-year rise in net profit on a 24-25 per cent jump in net interest income (NII). Net interest margin (NIM) is seen flattish on sequential basis.

HDFC Life insurance (up 25.3 per cent), Tata Consumer (20.3 per cent) and Shriram Finance  (20 per cent) are three other companies that are seen logging 20 per cent and above PAT growth in the June quarter.