Q3 results preview: Here’s what to expect from Nifty50 companies

Nifty50 firms are likely to post up to 10 per cent year-on-year (YoY) rise in profit for the December quarter (Q3FY24) mainly driven by the cement, auto and industrials sectors. An assessment by Antique Stock Broking showed that Nifty50 companies may report 5.2 per cent year-on-year (YoY) growth in revenue, 6.6 per cent rise in Ebitda and 8.1 per cent increase in profit after tax. 

On the other hand, Nuvama Institutional Equities believes Nifty earnings will grow 10 per cent YoY in Q3FY24. Given the high base, earnings are likely to moderate further in Q4FY24. The strong H1FY24 has ensured limited downside risks to FY24 earnings. 

For the information technology (IT) sector, Q3FY24 is expected to be subdued due to high furlough and weak macro demand and thus commentary or guidance must be monitored. IT majors Tata Consultancy Services (TCS) and Infosys are slated to announce their results on January 11. HCL Technologies and Wipro will post their results on January 12. 

According to Antique Stock Broking, auto players that are part of the Nifty50 index may post 36.5 per cent YoY growth in net profit in Q3FY24. Cement, industrials and healthcare companies may post 84 per cent, 34.5 per cent and 23.5 per cent YoY growth in net profit. On the other hand, IT companies may see a nearly 7 per cent dip in net profit in Q3FY24. 

Just like the previous quarter, the cement industry’s Ebitda is expected to show a strong YoY increase in Q3FY24 and is supported by rise in average selling price and a reduction of power and fuel costs. 

IDBI Capital Markets expects the average EBITDA of cement companies to increase by 48 per cent YoY with ACC to report a 99 per cent rise due to low base. 

Sharing its view on the banking sector, IDBI Capital Markets said that net interest margins (NIMs) continue to remain under pressure albeit at a slower pace during Q3FY24 led by re-pricing of liabilities for banks. 

“System credit growth remains healthy at 16 per cent YoY (Dec 15) led by the retail and services sector. Retail portfolio led by demand for home loans and vehicle loans while credit guarantee scheme, working capital loans for better-rated corporates as well as gold loans continue to support. Asset quality should continue to improve as slippages are expected to remain under control,” IDBI Capital Markets said. The brokerage has a ‘Buy’ rating on lenders such as Axis Bank, Federal Bank, HDFC Bank and ICICI Bank, among others. 

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