Tata Steel, Britannia, Hero MotoCorp, Ambuja Cements Q2 previews; Here's what brokers say

A host of large cap companies, including a few Nifty constituents, are set to announce their results for the quarter ended on September 30, 2023. The list includes names such as Bajaj Finance Ltd, Tata Steel Ltd, Hero MotoCorp Ltd, Sun Pharmaceutical Industries Ltd, Britannia Industries Ltd and Ambuja Cements Ltd. Here's what various brokerage firms expects from these companies:

Bajaj Finance
IIFL Securities expects Bajaj Finance's high growth and superior execution to sustain. IIFL expects Bajaj Finance’s interest income to come in at Rs 7,200 crore while it sees pre-provisioning operating profit (PPoP) at Rs 5,930 crore, up 32 per cent year-on-year (YoY) and 7 per cent quarter-on-quarter (QoQ). Net profit is seen at Rs 3,550 crore, up 28 per cent YoY and 3 per cent QoQ.

Bajaj Finance has reported the highest ever sequential AUM growth of 7.5 per cent in a seasonally weak quarter along with strong new customer acquisition. "Margin compression due to higher cost of funds is expected to result in slightly slower NII growth of 30 per cent. We expect credit costs to inch up to 165bps partially offset by lower opex as benefits of operating leverage play out," IIFL said.

Sharekhan sees Bajaj Finance to report a net interest income of Rs 7,110 crore, rising 28 per cent YoY and 6 per cent QoQ. Its PPoP is seen at Rs 5,872 crore, suring 31 per cent YoY and 6 per cent QoQ. Its net profit is likely to come at Rs 3,631 crore, increasing 31 per cent YoY and 6 per cent QoQ.

Tata Steel
For Tata Steel, Axis Securities expects Ebitda per tonne at Indian operations to improve slightly by 3 per cent QoQ to Rs 14,450 per tonne on account of lower coking coal costs, partially offset by lower realisations. Tata Steel reported Indian sales volume at 4.82 mt while Europe sales volume were impacted due to relining at one of the BF in the Netherlands and due to lower demand.

In Europe, it models an Ebitda per tonne loss of $137 per tonne against the loss of $96 per tonne in Q1FY24, on account of lower realisation and higher fixed costs, partially offset by lower coking coal consumption costs. Tata Steel's revenue is seen at Rs 52,986 crore, down both QoQ and YoY. Ebitda may come at Rs 4,676 crore, falling sharply YoY and QoQ.

Prabhudas Lilladher expects Tata Steel to report a net profit of Rs 52,769.3 crore, fallin 12 per cent YoY and QoQ. EBITDA is likely to come in at Rs 4,778.9 crore, falling 21 per cent YoY and 8 per cent QoQ, with EBITDA margins to come in at 9.1 per cent. Adjusted profit is seen at Rs 33.7 crore, falling about 95 per cent on both YoY and QoQ basis.

Sun Pharmaceutical Industries
InCred Equities expects Sun Pharma's revenue at Rs 11,888 crore, flat sequentially. Ebitda may fall 10 per cent to Rs 3,005.5 crore, with Ebitda margins may squeeze down at 25.3 per cent. Net profit of the company may drop 2,039.5 crore. "We expect a meaningful decline in SUNP’s base generics portfolio, given the compliance issues at the company’s Halol and Mohali plants," said InCred.

Nuvama Institutional Equities expects Sun Pharma's revenue to come in at 12,144 crore, up 11 per cent YoY and flat sequentially. Ebitda is seen at Rs 3,157.4 crore, falling both yearly and sequentially, while EBITDA margins squeezing up to 320 basis points to 26 per cent. Adjusted net profit is seen flat at Rs 2,280.2 crore.

Hero MotoCorp
Kotak Institutional Equities seens Hero MotoCorp's revenue at Rs 9,411.3 crore, marginally up YoY and QoQ. EBITDA is seen at Rs 1,347.5 crore, rising 30 per cent YoY and 12 per cent QoQ. Ebitda margins may improve 287 bps YoY to 14.3 per cent. Net profit may come in at Rs 1,027.5 crore, surging 44 per cent YoY and 25 per cent QoQ.

"We expect revenues to increase led by increase in ASPs due to price increases and decline in volumes due to the continued weakness in entry-level motorcycle segment demand. We expect EBITDA margin to improve mainly driven by marginal increase in gross margins due to RM correction, price increases partly offset by an increase in losses in the EV segment due to price cuts," it said.

Revenue growth YoY to be driven by better realizations, despite drop in volumes. Ebitda margin expansion YoY to be driven by better net pricing and JPY depreciation benefits. Key thing to watch out for is demand outlook and product launch timeline, said Nuvama.

Britannia Industries
HDFC Securities expects Britannia's revenue at Rs 4,600 crore, up 15 per cent QoQ and 5 per cent QoQ. Ebitda is seen at Rs 800 crore, increasing in double digits with Ebitda margins coming in at 16.3 per cent, compressing 147 bps sequentially. Adjust profit may come in at Rs 560 crore, up 22 per cent QoQ and 13 per cent YoY.

JM Financial said that the operating environment is getting tough with pricing growth now off the table while demand is still soft. Margin comparator still favourable for one more quarter though. Biscuits growth was up 4 per cent but pricing eased 2 per cent. Gross profit and operating margins may expand 180 bps YoY.

Ambuja Cements
Phillip Capital sees Ambuja Cements revenue at Rs 4,145.4 crore, falling 12 per cent QoQ but up 13 per cent YoY. EBITDA is seen at Rs 885.6 crore, surging 191 per cent YoY but down 7 per cent QoQ, with EBITDA margins improving to 21.36 per cent. Net profit may rise 300 per cent YoY to 602.7 crore in the Q2FY24.

"Volume growth seen at 12 per cent YoY but down 13 per cent QoQ. Realisations seen improving marginally with Ebitda per cent tonne seen at Rs 1,123, surging 160 per cent YoY," Phillip Capital said.

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Also read: Tata Steel Q2 results: European operations to hit profitability, sales may fall 4-11%

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