Tata Motors, Coal India lead Nifty earnings upgrades in Q3; UPL, LTIMindtree top downgrades. What's next?

Nifty earnings upgrades in the December quarter were led by companies such as HDFC Life (27 per cent), Tata Motors (up 26 per cent), Coal India (up 10 per cent), Hero MotoCorp (up 10 per cent), Cipla (up 8 per cent) and Bharti Airtel (up 7 per cent). Nifty earning downgrades in the quarter gone by, on the other hand, were led by UPL (down 23 per cent), SBI Life (8.9 per cent), LTIMindtree Ltd (down 8 per cent), ITC Ltd (down 6 per cent), Divis Labs (down 5 per cent) and Hindustan Unilever (down 5 per cent) , as per Motilal Oswal Securities.

A total of six Nifty constituents saw upgrades of over 5 per cent, while four witnessed downgrades of over 5 per cent. A total of 20 Nifty firms witnessed earnings upgrades, 29 saw earnings downgrades and one saw no change in FY25 EPS estimates, Motilal Oswal data showed.

The quarter saw Nifty's profit after tax growing 17 per cent against an expectation of 11 per cent. Sales for the Nifty pack grew 6 per cent YoY, which were in line with estimates. Nifty Ebitda jumped 10 per cent YoY for the quarter, while Ebitda margin, excluding financials, expanded 90 basis points to 19.6 per cent.

“Nifty delivered a strong beat with a 17 per cent YoY PAT growth (vs estimate of +11 per cent). Five Nifty companies – Tata Motors, HDFC Bank, Tata Steel, ICICI Bank, and JSW Steel – contributed 56 per cent of the incremental YoY accretion in earnings. Ex-OMCs, Nifty’s earnings grew 17 per cent YoY (vs estimate of +10 per cent). Ex-Metals & O&G, Nifty’s earnings were up 15 per cent YoY (versus estimate of +10 per cent),” Motilal Oswal said.

Motilal Oswal said its Nifty earnings per share (EPS) estimates for FY24/FY25 have remained almost unchanged at Rs 975/Rs 1,142 against Rs 976/Rs 1,142). It now expects the Nifty EPS to grow at 21 per cent in FY24 and 17 per cent YoY in FY25

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Also read: 5 Nifty firms, including two Tata group cos, contributed 56% of incremental growth in Q3 earnings