Nifty companies report robust earnings, Coal India EPS forecast surges

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Nifty companies report robust earnings, Coal India EPS forecast surges
Credit: © Reuters.

Several firms listed on India's Nifty index have reported higher-than-expected earnings, according to Motilal Oswal (NS: MOFS ) Securities. Key performers included BPCL, HDFC Bank (NS: HDBK ), Tata Motors (NS: TAMO ) (NYSE: TTM ), and ICICI Bank (NS: ICBK ) among others. Notably, Coal India (NS: COAL )'s earnings per share (EPS) estimate for the fiscal year 2024 soared by 18.1% to ₹41.1 (USD1 = INR83.214).

The financial services firm adjusted its FY24E Nifty EPS upwards by 1.1% to ₹996, anticipating a year-over-year growth of 24% in FY24 and 14% in FY25. This revision is attributed to the impressive performance of these companies, with 42% exceeding profit after tax (PAT) estimates and only 12% falling short. Excluding financials, Nifty constituents saw a profit increase of 29% year-over-year for the quarter, outpacing the growth of 21%.

Despite the positive trend, Apollo Hospitals (NS: APLH ), UPL Ltd (NS: UPLL ), ONGC (NS: ONGC ) Ltd, Bharti Airtel (NS: BRTI ), and Wipro (NS: WIPR ) (NYSE: WIT ) led the earnings downgrades. Additionally, SBI Life Insurance (NS: SBIL ), Wipro, Divis Labs, and UPL did not meet profit expectations. The report highlighted that nine Nifty companies experienced EPS upgrades over 5%, while five faced downgrades exceeding the same threshold.

In light of these developments, Motilal Oswal Securities has maintained its sectoral allocations and weights. The firm continues to favor sectors such as financials, consumption, industrials, automobiles, and healthcare in its model portfolio based on their growth potential.

Currently, the Nifty is trading at a 12-month forward price-to-earnings (PE) ratio of 17.8 times. This valuation reflects market sentiment and the performance outlook for these key Indian companies as they navigate through economic conditions in the coming year.

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