The fourth quarter of FY24 has brought happy tidings for India Inc. A calculation of the results declared till May 6 shows that consolidated net profit rose 30% year-on-year (YoY) in Q4FY24, against a 4% rise in the year-ago period. The top line witnessed a rise of 14% YoY to Rs 8.8 lakh crore.
A total of 28 companies in the Nifty 50 index had reported their results in Q4FY24 till May 6. While some of them showed resilience and growth, others grappled with challenges stemming from economic uncertainties and shifting consumer behaviour.
Let us take a closer look at the sectors. The IT sector reported a mixed set of results. While TCS and Infosys posted 9.14% and 30% YoY growth, respectively, in consolidated net profit, to Rs 12,434 crore and Rs 7,969 crore, for HCLTech, the number was almost flat at 0.08% YoY to Rs 3,986 crore. The net profit of Tech Mahindra, LTIMindtree, and Wipro witnessed a decline of 41%, 1.23% and 8% respectively.
“The IT services industry is poised to continue moderate revenue growth in the near term. However, operating profits are expected to improve with cost optimisation measures,” says Vinod T.P., Research Analyst at Geojit Financial Services. The gross sales of TCS and Infosys rose 3.5% and 1.3%, respectively, YoY, while Tech Mahindra and Wipro reported a fall of 6.1% and 4.2% YoY.
Energy-to-telecom behemoth Reliance Industries Ltd (RIL) posted a 1.80% fall in net profit to Rs 18,951 crore in Q4FY24 against Rs 19,299 crore in Q4FY23. Gross sales increased 10% YoY to Rs 2.65 lakh crore. According to financial advisory firm YES Securities, despite a challenging global environment and declining petchem margins, the oil-to-chemicals segment delivered a 3% YoY Ebitda increase on operational optimisation. RIL’s capex over FY25 is expected to remain elevated given the ongoing investment in telecom (5G), expansion of retail infrastructure, and new energy business.
In the banking and NBFC space, Axis Bank posted a consolidated profit of Rs 7,599 crore, against a loss of Rs 5,361.85 crore in Q4FY23. HDFC Bank and ICICI Bank also reported a 39.92% and 18.46% YoY rise in net profit to Rs 17,622.38 crore and Rs 11,671.52 crore respectively. Among other major Nifty companies, IndusInd Bank, Bajaj Finance, Bajaj Finserv, and Shriram Finance have posted a rise of 14.96%, 21.11%, 19.76%, and 56.30%, respectively, in their bottom line figures.
“Overall, we have not seen any [negative] surprise,” says Saurabh Mukherjea, Founder & CIO of Marcellus Investment Managers, adding that banking players have reported a decent set of numbers. “However, we believe that export-oriented companies including manufacturing, specialty chemicals, and pharma companies will post good results in the forthcoming result seasons. We may see some solidity in middle-class consumption themes.”
According to financial services company Motilal Oswal Financial Services, corporate earnings, so far, have been in line with their estimates in Q4FY24, with the overall performance led by heavyweights such as HDFC Bank, ICICI Bank, Maruti Suzuki, TCS, and Bajaj Finance.
Maruti Suzuki India reported 47.05% YoY growth in net profit at Rs 3,952.30 crore. Bajaj Auto also posted 18% YoY growth in net profit at Rs 2,011.43 crore.
Ravi Singh, SVP-Retail Research at Religare Broking says, “The early birds suggest fluctuating input costs and stringent emission norms added some strain in the automobile sector. Companies that invested in electric and autonomous tech showcased resilience, hinting at a promising future driven by innovation and sustainability.”
In the FMCG space, inflationary pressures and shifting consumer preferences shaped the landscape. Net profit of Hindustan Unilever Ltd (HUL) declined 1.61% to Rs 2,558 crore during the quarter under review. The bottom line of Tata Consumer Products also retreated 19.35% YoY to Rs 216.63 crore. On the other hand, Nestlé posted 26.81% YoY growth in net profit at Rs 934.17 crore. “HUL continues to disappoint as the rural economy is still not on a strong footing,” says Siddarth Bhamre, Head of Research at Asit C Mehta Investment Intermediates.
Bhamre adds that while auto companies so far have shown strong revenue YoY growth, barring TCS, most of the IT names have been struggling as the path to higher growth is still not visible. “Earnings are growing at a reasonable pace but it’s not broad-based,” he adds.
Among other major results, Adani Ports and Special Economic Zone, UltraTech Cement, HDFC Life Insurance, and SBI Life Insurance reported a growth of 76%, 35%, 14%, and 4% respectively in their net profit. The bottom line of Adani Enterprises slipped nearly 38% YoY to Rs 450.58 crore.
An assessment of 350 companies by rating agency CRISIL shows that India Inc. is likely to log a 4-6% revenue growth in Q4. @iamrahuloberoi