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Motilal Oswal Report
The Q1 FY21 corporate earnings were better than our muted expectations for both the Nifty and the Motilal Oswal Financial Services Ltd. universe.
Nifty sales declined 29% YoY (versus estimate decline of 30%), while Ebitda/profit before tax/profit after tax declined 6%/30%/26% YoY (versus estimate decline of 11%/39%/35%).
Six sectors posted YoY profit growth - Healthcare (27%), Utilities (16%), PSU Banks (10%), Life Insurance (4%), Private Banks (1%) and Technology (1%).
The sectors that posted losses in line with our expectations were Automobiles, Metals, Retail and Telecom.
Our FY21/FY22E Nifty earning per share estimates have been marginally revised upwards by 2.1%/2.7% to Rs 477/Rs 664 (prior: Rs 467/Rs 647).
We now expect FY21 Nifty earning per share to grow 2.4% YoY.
Breadth of earnings revision was positive - 84 companies in the MOFSL Universe saw upgrades of more than 5% while 40 witnessed downgrades of more than 5% for FY21.
Corporate commentaries were cautiously optimistic based on gradual demand recovery June 2020 onwards due to easing of the lockdown restrictions.
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