Bleak earnings pave weak start for Q1 season
Operating earnings pressure on Nifty-50 was largely driven by IT services, cement, and FMCG (11% YoY, 3% behind expectations): Report
image for illustrative purpose
New Delhi Corporate earnings season started on a weak note -- Nifty-50 (ex-financial & commodity) operating earnings grew by 11 per cent YoY, 3 per cent behind our expectations, Antique Stock Broking said in a research.
The miss in terms of operating earnings was largely driven by IT services, cement, and FMCG. Overall, the domestic demand momentum continues in banks, cement, and real estate; while FMCG was a laggard. Broadly, we continue to believe that the market appears to be capped in the near term given elevated valuation amidst slower growth in advanced economies in the near term, the report said. Indian equities remains near life-time high levels, supported by strong FPI equity flows, highest CYTD among select EMs and the highest for the fifth month in a row, the report said. The report said 32 stocks under coverage have announced results so far (54 per cent weight in the Nifty 50), Nifty-50 (excluding financial, commodity) announced so far reported revenue/ EBITDA/ PAT growth of 11 per cent/ 11 per cent/ 12 per cent YoY in 1QFY24 and is behind expectation by 0 per cent/ 3 per cent/ 4 per cent, respectively.
Operating earnings miss was largely seen in IT services (HCL Tech, Wipro), cement (Ultratech, Dalmia Bharat), and FMCG (HUL).
