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These 8 Nifty companies posted over 50% increase in net profit in Q3; should you buy?

These 8 Nifty companies posted over 50% increase in net profit in Q3; should you buy?

Analysts say that Indian Inc is expected to see moderate earnings growth because of factors such as global economic conditions, consumer demand, and policy developments

Rahul Oberoi
Rahul Oberoi
  • Updated Feb 14, 2025 1:22 PM IST
These 8 Nifty companies posted over 50% increase in net profit in Q3; should you buy?The net profit of Hindalco Industries, Bharat Electronics and Apollo Hospitals Enterprise also increased by 60.2%, 52.5% and 51.8%, respectively, for the quarter ended December 2024.

The Q3FY25 earnings season for domestic companies presented a mixed yet cautiously optimistic outlook across various sectors. Data showed that as many as eight companies in the benchmark index posted more than 50% rise in net profit during the quarter under review. Overall, the combined net profit of Nifty50 firms grew 12.89% year-on-year on a 6.61% rise in gross sales for the quarter ended December 2024.

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With a growth of 505%, Bharti Airtel was top on the list. The telecom major posted a net profit of Rs 14,781.20 crore in Q3FY25 over Rs 2,442.20 crore in Q3FY24.

 Motilal Oswal Financial Services said, “Reported attributable PAT at around Rs 14,800 crore was significantly above our estimate on account of exceptional gains on Indus consolidation.” The brokerage has a ‘Buy’ rating on Bharti Airtel with a target price of Rs 1,990, indicating an upside of 16% against the current market price of Rs 1,713.

“Bharti Airtel reported another strong quarter, with a further 6% and 9% QoQ increase in India wireless revenue and EBITDA driven by residual flow through of recent tariff hikes and 90% incremental margin. Bharti continued to be the biggest beneficiary of the tariff hikes with Rs 35 increase in wireless ARPU over the last two quarters (vs Rs 20 for RJio),” Motilal Oswal Financial Services said in a report.

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Tech Mahindra is next on the list. The IT major reported 92.60% YoY growth in net profit at Rs 983 crore during the quarter under review. It was followed by Shriram Finance (up 74%) and SBI Life Insurance Company (up 71.20%). KRChoksey Shares and Securities has an ‘Accumulate’ call on Tech Mahindra with a target price of Rs 1,801.

“Profit growth of 92.6% YoY was in line our estimates. However, the QoQ decline was attributable to one one-time gain on the sale of land in Q2FY25,” KRChoksey Shares and Securities said in a report. Net profit of Tech Mahindra declined 21.35% quarter-on-quarter.

On the other hand, Axis Securities is bullish on Shriram Finance with a target price of Rs 705. “The company continues to deliver steady growth without pursuing aggressive growth in any of its segments. We continue to like Shriram Finance for its ability to reduce cyclicity with lowering dependence on the CV portfolio and pursuing healthy growth in non-CV segments,” Axis Securities said adding Shriram Finance has the potential to deliver healthy return ratios.

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Brokerage Nirmal Bang Securities is positive on SBI Life Insurance with a target price of Rs 1,700. Shares of the company traded at Rs 1,453 in the afternoon trade on February 14.

Coming back to the other top performers of Q3, the country's largest lender State Bank of India (SBI) reported a 70.40% YoY rise in net profit at Rs 18,853.16 crore. According to BP Wealth, SBI showcased a strong performance in Q3 FY25 driven by steady growth in net interest income, healthy fee income, and relatively lower credit costs compared to its competitors. Loan growth for SBI appears solid, slightly above the industry average, while deposit mobilisation matches the industry level, primarily coming from term deposits.

The net profit of Hindalco Industries, Bharat Electronics and Apollo Hospitals Enterprise also increased by 60.2%, 52.5% and 51.8%, respectively, for the quarter ended December 2024.

Sharing his views on the forthcoming quarterly results, Ajit Mishra – SVP, Research, Religare Broking said, “Indian Inc is expected to see moderate earnings growth in the upcoming quarter, contingent on factors such as global economic conditions, consumer demand, and policy developments.”

Among the other major companies in the Nifty50 index, Reliance Industries, TCS and ICICI Bank reported 7.4%, 12% YoY and 16.6% growth in net profit in Q3. Mishra is positive on Reliance Industries. “The stock’s current valuations appear reasonable after the recent correction. The retail segment, which had faced a slowdown in recent quarters, is now well-positioned for recovery. Additionally, the government's recent tax cuts will provide further benefits. The company's new energy business, where it has been investing for years, is set to commence operations in the coming quarters, potentially driving profitability growth. Moreover, the highly anticipated Jio listing, expected in Q2 FY26, is likely to create positive market sentiment around the stock,” he said.

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On the other hand, the bottom line of Adani Enterprises, JSW Steel, Grasim Industries, IndusInd Bank and Tata Steel declined 96.90%, 70.30%, 40.6%, 39.1% and 36.4% YoY.

Vishnu Kant Upadhyay, AVP - Research & Advisory, Master Capital Services said, “The potential recovery in upcoming quarter for Indian companies appears promising, driven by a combination of various favourable factors. The recent Union Budget 25-26 has laid a strong base for recovery focusing on tax relief, infrastructure development, and inclusive welfare measures. The budget introduced several measures to boost rural development and agriculture, these initiatives are expected to enhance rural incomes and consumption. The increase in tax exemption limit is ready to leave more money is hands of people, which will also lead to boost in consumption and investment.”

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Feb 14, 2025 1:22 PM IST
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