Q2 result previews: Adani Ports, TechM, Sun Pharma & UPL

Dozens of companies will announce their September quarter earnings  on Tuesday, including four Nifty constituents namely Sun Pharmaceutical Industries, Adani Ports & SEZ, Tech Mahindra and UPL. Among the four, Tech Mahindra is expected to report a de-growth in year-on-year profit. Sun Pharma is seen reporting a marginal fall in profits. UPL is expected to report 15-20 per cent jump in profit growth. Adani Ports is seen reporting profit in a wide range of Rs 986 crore to Rs 1,600 crore. 

Tech Mahindra: Brokerage Sharekhan expects the IT major to report a 9.3 per cent YoY drop in net profit at Rs 1,215 crore despite a 21.4 per cent YoY rise in net sales at Rs 13,208 crore. Operating profit margin is seen falling 321 basis points YoY to 15.1 per cent. 

"The company is expected to report soft CC revenue growth of 2.5 per cent QoQ led by organic growth of 2.1 per cent QoQ and 0.4 per cent from full benefit of Thirdware acquisition. Tech Mahindra is likely to have cross currency impact of 190 bps. 

ICICI Direct said TechM's revenue growth would be be impacted by exiting of a few portfolios, while margins could be flat QoQ despite wage hike for the quarter. 

"The company is expected to report 2 per cent QoQ growth in CC revenues but dollar revenue is expected to grow 0.5 per cent QoQ due to 150 bps cross currency headwinds. PAT is expected to improve 4.4 per cent QoQ," it said adding that investor would watch out for outlook on margin, large deals and incremental order flow from 5G services.

This brokerage sees TechM's profit falling 11.8 per cent YoY to Rs 1,181 crore.

Sun Pharma: Nirmal Bang Institutional Equities expects Sun Pharma to report a profit of Rs 1,967.20 crore, down 0.6 per cent YoY. It sees sales rising 17.5 per cent YoY to Rs 11,223 crore. Ebitda margin is seen at 26.2 per cent against 26.8 per cent YoY.

In an earnings preview, Nirmal Bang said the revenue growth will be led by strong growth in the US business. "Specialty segment revenue will be driven by strong growth in Winlevi, Cequa and Ilumya. New launches, including gPentasa and gAmbisome, are expected to drive US generic growth. Domestic business is expected to grow 12 per cent YoY mainly due to continuous strong growth in key segments," it said.
 
Edelweiss sees Sun Pharma's profit at Rs 1,981 crore. It sees sales at Rs 11,191 crore.

"Taro US revenues are expected to grow 3 per cent QoQ at $113 million to account for Alchemee revenues offset by dapsone competition. Expect domestic formulations to report 14 per cent YoY. We expect overall Ebitda margins at 25.4 per cent impacted partly by higher opex," it said.

UPL: The Nifty company may report a 19.6 per cent YoY rise in net profit at about Rs 900 crore on a 15.7 per cent yoY rise in net sales at Rs 12,200 crore, Motilal Oswal said. 

The brokerage sees Ebitda for the company growing 18.2 per cent to Rs 2,400 crore. 

Kotak Institutional Equities sees UPL's Q2 profit at Rs 772.50 crore, up 14.6 per cent YoY. It sees sales rising 16.6 per cent YoY to Rs 12,285.90 crore. Ebitda margin is seen improving 85 basis points to 19.1 per cent against 18.3 per cent YoY due to higher gross margins, aided by better product mix.  

"We expect UPL to report healthy revenue growth, driven by all major regions except Europe which is likely to remain flat due to drought. We expect India to report the highest revenue growth, benefitted by recovery of some lost sales in 1Q, followed by Rest of the World and North America," it said. 

Adani Ports & SEZ: The Adani group company may report a 21 per cent year-on-year (YoY) rise in net profit at about Rs 1,600 crore on a 32 per cent yoY rise in net sales at Rs 4,700 crore, Motilal Oswal said in a note. Elara Securities sees sales rising 26.6 per cent YoY to Rs 4,471 crore. It sees profit at Rs 986 crore. 

"Expect forex loss of Rs 900 crore on account of rupee depreciation of 3 per cent during Q2," it said. 

Meanwhile, Kotak sees a profit of Rs 1,018.40 crore for the quarter. "We model an 11 per cent YoY improvement in comparable revenues. The consolidation of Gangavaram port volumes from Q2 yields a higher 26 per cent YoY growth in volumes. Higher yoy realisations and SEZ boost drive 40 per cen YoY growth in revenues," it said. 

Adani Ports' volume were up 28 per cent YoY at 90 mt and Elara expects similar port revenue growth, with port Ebitda margin maintained at 70 per cent. The performance will be supported by growth in the logistics segment of 30 per cent with margin maintained at 26 per cent, it said.

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