Expect mixed earnings performance in fourth quarter: Antique Stock Broking

Q4 earnings preview: As companies gear up to release their earnings for the fourth quarter of FY24, analysts at Antique Stock Broking expect a mixed bag of results across various sectors. Projections indicate that Nifty 50 companies, excluding financial, telecom, and commodity sectors, are expected to post modest revenue, EBITDA, and profit after tax (PAT) growth of around 7 per cent, 6 per cent and 6 per cent respectively on a year-over-year (YoY) basis. However, margins are expected to witness a slight decline of approximately 20 basis points (bps) to 19.8 per cent.

Analysts foresee robust operating profit growth in sectors such as auto original equipment makers (OEMs), retail, cement, oil marketing companies, pharmaceuticals, and textiles. On the other hand, sectors including agrochemicals, metals, building materials, utilities, and FMCG are expected to lag behind.

Within the industrial sector, analysts anticipate a healthy annual revenue growth of around 15 per cent, aided by normalised supply chains and swift execution. However, railway companies are expected to report a soft quarter primarily due to a high base effect.

Defence companies are projected to experience strong revenue growth of 19 per cent on the back of improvements in the supply chain and execution. However, margins may face pressure due to changes in revenue mix and a high base.

The infrastructure sector, with a focus on water, road, power, and railways, is expected to report low-teen earnings growth. Utilities coverage is likely to see mid-single-digit growth, while the cement sector is expected to benefit from higher volumes and lower costs offsetting weak prices, analysts at Antique Stock Broking said in a report.

In the automotive industry, strong PAT growth of approximately 25 per cent is expected, supported by revenue growth and margin improvement. However, auto ancillaries may witness flattish revenue growth and sequential margin decline due to cost inflation and price cuts.

FMCG companies are projected to report soft earnings growth, with demand trends remaining subdued, particularly in rural markets. Conversely, the consumer durables segment is expected to perform well due to a pickup in primary channel filling.

The hospitality industry is forecasted to report robust results in Q4FY24, driven by seasonality and strong pricing, despite flat occupancies.

Meanwhile, within the banking sector, strong loan growth and a benign credit cost environment are expected to support earnings growth, although net interest margin (NIM) may moderate sequentially.