- Over a third of the results for listed Indian corporations have been announced, with 37 of the top 100 heavyweight stocks revealing their performance.
- The actual YoY PAT growth for these stocks is 10.1%, surpassing the expected 6.9%.
- Auto, Retail and Financials sectors have performed well, while FMCG, Energy, Insurance, and IT sectors have shown weaker performances.
With over a third of the results announced for listed Indian corporations, the actual YoY PAT growth surpasses expectations, with Auto, Retail and Financials sectors leading the way.
Banking Sector Performance
The banking sector has performed in line with expectations, with quarterly earnings growing on a healthy, high double-digit year-on-year basis. However, there has been a slight contraction in Net Interest Margins (NIMs) across several companies. Medium-sized and rural banks have observed a spike in Non-Performing Assets (NPAs), raising concerns about the quality of their assets. Looking forward, banks are anticipated to show only suboptimal growth in Net Interest Income and net profit due to increased costs of funds and an uptick in Gross Non-Performing Assets (GNPAs).
IT Sector Performance
The Indian IT sector was predicted to experience sluggish growth in Q4, with most results falling below expectations due to difficulties encountered by the BFSI and retail sectors globally. However, there was an improvement in margins attributed to cost-saving measures initiated by companies during slum demand. Despite an uptick in deals and rising demand from Generative AI, the IT sector is expected to face volatility due to persistent concerns about prolonged inflation and high rates.
FMCG Sector Performance
In the FMCG sector, revenue growth was almost in line with expectations, with the growth in operating profit surpassing anticipations due to lower input prices, improvements in product mix, and price growth. Revenue growth is expected to improve in the coming quarters as volume growth is expected to gradually improve, supported by a pickup in rural demand given the normal monsoon forecast and presumption of government’s rural focus in the upcoming budget.
Conclusion
While the overall results performance slightly exceeds expectations, there is a consensus that the earnings growth expected for FY25 is likely to be slower compared to FY24. Projections suggest that the significant 23% EPS growth observed in FY24 within the Nifty50 is forecasted to moderate to approximately 14-15% in FY25.
