Bharti Airtel, TechM, L&T, ICICI Bank: Nifty shares that saw EPS upgrades post Q2 results

Telecom major Bharti Airtel Ltd led the Nifty earnings per share (EPS) upgrades post the September quarter results, followed by IT giant Tech Mahindra Ltd, FMCG firm Tata Consumer Products Ltd and engineering and construction major Larsen & Toubro Ltd. ICICI Bank Ltd, HCL Technologies Ltd, Wipro Ltd, Kotak Mahindra Bank and Sun Pharma also saw upgrades, but marginally.

In the case of Bharti Airtel, MOFSL upped its EPS estimates by 16.3 per cent to Rs 30.80. Q2FY25 was expected to be a strong quarter on account of flowthrough of the recent tariff hikes. Bharti Airtel and peer RJio reported a sequential spike in ARPUs and revenue, with full benefits from the tariff hikes likely to be reflected by Q3FY25, the brokerage said.

Bharti Airtel's was the only double-digit EPS upgrade by MOFSL in 34 Nifty results that were out till October 31. The 34 companies account for 74 per cent of the estimated PAT for Nifty universe, 50 per cent of India's market capitalization; and 81 per cent weightage in the Nifty, MOFSL said.

Tech Mahindra saw its FY25 EPS estimates rising 8.8 per cent to Rs 44. It was followed by upgrades in TCPL (6.3 per cent), L&T (2.9 per cent), ICICI Bank (2.8 per cent), HCL Tech (2.4 per cent) and Wipro (2.3 per cent). Kotak Bank and Sun Pharma saw up to 1 per cent EPS upgrades.

"Earnings of the 34 Nifty companies that have declared results so far have been flat YoY (versus estimate of 2 per cent YoY), fuelled by ICICI Bank, Axis Bank, Bharti Airtel, NTPC, and HDFC Bank. Conversely, BPCL, JSW Steel, Coal India, IndusInd Bank, Reliance Industries, and Ultratech Cement contributed adversely to Nifty earnings. Nine companies within the Nifty reported profits below our expectations, while 10 recorded a beat and 15 registered in-line results," MOFSL said.

The brokerage said Nifty EPS has seen 7 per cent downward revision in the last six months, reducing the expected FY25 earnings growth to just 5 per cent, weakest since FY20. The Nifty is trading at a 12-month forward P/E of 20.7 times, in-line with its long-period average of 20.5 times.

"Despite the recent 7-8 per cent correction from the highs, the broader markets are still trading at expensive valuations (NSE Midcap 100 at ~30x forward P/E)," it said.