In a recent June quarter earnings preview note, Motilal Oswal Financial Services (MOFSL) projected that the Nifty50 earnings would grow by 4 percent on a year-on-year basis. Excluding global commodities like Metals and Oil & Gas (O&G), the Nifty is expected to report a 10 percent YoY earnings growth for the quarter.
The overall earnings growth is projected to be driven by domestic cyclicals, especially the BFSI (Banking, Financial Services, and Insurance) and Auto sectors, with significant contributions from Metals and Healthcare.
Sales and EBITDA for Nifty are anticipated to improve by 6 percent and 4 percent YoY, respectively. Excluding Oil Marketing Companies (OMCs), the EBITDA of Nifty is expected to grow by 8 percent YoY.
While most companies are expected to post moderate earnings growth in the June quarter, MOFSL has identified 4 firms likely to achieve over 40 percent YoY growth in net profit for Q1FY25. Let’s take a closer look at these companies.
Tata Steel: MOFSL predicts that the steel major will see a 79.4 percent YoY increase in net profit to around ₹1,100 crore from ₹600 crore in the same quarter last year. Despite a 2.5 percent YoY decrease in net sales to ₹58,000 crore, EBITDA is expected to improve by 15 percent to ₹6,000 crore. The company’s India business is forecasted to see normalized volume in Q1FY25, while its overseas operations are expected to remain steady.
Apollo Hospitals: The hospital firm is expected to report a 79 percent YoY rise in net profit to ₹298.2 crore in Q1FY25. Gross sales are projected to increase by 13.5 percent to ₹5,013 crore, with EBITDA improving by 33 percent to ₹676.8 crore. The growth is attributed to increased occupancy and Healthco operations. Investors should keep an eye on GMV outlook in Apollo 24/7 and updates on capacity expansion in key cities.
Divis Labs: The pharma firm’s net profit is forecasted to grow by 43.7 percent YoY to ₹512.7 crore in Q1FY25, with net sales increasing by 23.7 percent to ₹2,199.4 crore. EBITDA is expected to rise by 35.3 percent to ₹682 crore, supported by growth in CS, Nutraceutical, and generics business.
Hindalco Industries: MOFSL estimates a 42.4 percent YoY increase in the net profit of the metal company to ₹3,500 crore in Q1FY25, with net sales growing by 10.1 percent to ₹58,300 crore. EBITDA is projected to improve by 23 percent to ₹7,000 crore, driven by strong volumes and improved ASP. Investors should closely monitor the timeline for commissioning multiple capex and Novelis EBITDA/t guidance.
