Coal India, Tata Steel, Maruti, JSW Steel: Nifty stocks with highest EPS upgrades post Q2

Coal India Ltd, Tata Steel Ltd, Maruti Suzuki India Ltd, JSW Steel Ltd and Titan Company Ltd are among Nifty constituents that saw highest upgrades to FY24 earnings per share estimates post the September quarter results. Apollo Hospitals, UPL Ltd, ONGC Ltd, Bharti Airtel and Wipro, led the earnings downgrades. In total, nine Nifty companies saw upgrades of over 5 per cent while five witnessed downgrades of over 5 per cent, data compiled by Motilal Oswal Securities suggest.

Data showed Coal India's EPS estimate for FY24 jumped 18.1 per cent to Rs 41.1.

Tata Steel saw 13.7 per cent upgrade in FY24 EPS estimate while Maruti Suzuki saw EPS upgrade of 10.2 per cent for the ongoing fiscal. Apollo Hospitals (down 12.7 per cent), UPL (down 11 per cent), ONGC (down 9 per cent), Bharti Airtel (down 8.2 per cent), and Wipro (down 8.2 per cent) saw drops in FY24 EPS estimates.

"We raise our FY24E Nifty EPS by 1.1 per cent to Rs 996 (earlier: Rs 986) due to the notable earnings upgrades in Coal India, HDFC Bank, Maruti Suzuki, BPCL, and ICICI Bank. We now expect the Nifty EPS to grow 24 per cent/14 per cent YoY in FY24/FY25," Motilal Oswal Securities said.

Sales and profit for Nifty constituents, Motilal Oswal Securities said, was marginally better than its estimates. A total of 42 per cent of Nifty firms exceeded Motilal's PAT estimates while 12 per cent missed. Excluding financials, profit for Nifty constituents rose 29 per cent YoY for the quarter compared with 21 per cent growth.

As per Motilal Oswal Securities, HDFC Bank, Tata Motors, JSW Steel, ICICI Bank, Maruti Suzuki, Mahindra & Mahindra, State Bank of India, Coal India, Ultratech Cement, Eicher Motors, Hero MotoCorp, Cipla, Bajaj Auto, Dr Reddy’s Labs, Titan Company, Tech Mahindra, Tata Steel, and Grasim Industries delivered higher-than-estimated earnings.

SBI Life Insurance, Wipro, Divis Labs and UPL, on the flip side, missed profit estimates. Nifty is trading at a 12-month forward PE ratio of 17.8 times, which is at 12 per cent discount to its long-period average (LPA).

"We largely maintain our sectoral allocations and weights, relying on the sectors that have shown growth potential to drive our stock selection framework. We remain overweight on financials, consumption, industrials, automobiles and healthcare; while we maintain our underweight stance on metals, energy, IT and utilities, and neutral outlook on telecom in our model portfolio," Motilal said.

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