The Big Hits And Misses Of Fourth Quarter Earnings Season
Report card. (Source: BloombergQuint)

The Big Hits And Misses Of Fourth Quarter Earnings Season

Revenue and profit of Nifty 50 companies rose in the fourth quarter before India faced a deadlier second wave of Covid-19.

As many as 14 companies of NSE Nifty 50 Index beat estimates for net profit, according to BloombergQuint’s analysis of Bloomberg data. Estimates were available for 45 of the index’s constituents. The metric was in line with estimates for 15 companies, with 16 not meeting the projections.

Aggregate profit and revenue rose in double digits for the second straight quarter in the three months through March. That came amid higher government spending, ample liquidity from the banking sector and increased exports.

  • Aggregate net profit rose 11.3% quarter-on-quarter.

  • Aggregate revenue increased 10.8%. Nearly three-fourths of the index’s constituents witnessed a sequential improvement in revenue growth.

  • Consolidated operating profit of 39 Nifty 50 companies, excluding banks, finance and insurance firms, grew 13.9% over the previous quarter compared to 12.1% increase in the third quarter.

  • Operating margins of around 22 out of 39 firms fell in the fourth quarter, pulled down by rising costs of inputs.

Motilal Oswal said demand improved as states eased restrictions. “The expeditious containment of active Covid-19 cases and accelerated pace of vaccinations would boost and provide confidence in economic growth recovery in fiscal 2022,” the brokerage said in its recent report. “However, after the recent run-up, the Nifty now trades at rich valuations. Thus, any misses in the FY22 estimates earnings delivery may act as a dampener.”

Here’s how each sector fared in the quarter ended March.


  • Aggregate revenue of automakers rose 8% sequentially, compared to 24% in the third quarter. Purchases, which had spiked in the quarter ended December because of the festive and wedding seasons, moderated in the fourth quarter.

  • Tata Motors Ltd.’s revenue rose the most, at 17% over last quarter, but dragged the sector’s profitability by reporting a loss of Rs 7,585 crore owing to an exceptional item. Vehicle sales jumped 21% sequentially, helped by a faster-than-expected economic recovery and demand for personal mobility.

  • Mahindra & Mahindra Ltd.’s revenue, Ebitda and profit fell quarter-on-quarter amid supply chain issues emanating from a global shortage of semiconductors. While its revenue fell 11%, Maruti Suzuki India Ltd.’s net profit dropped 37% as a result of rising commodity prices and foreign exchange fluctuations.

  • Sales of India’s largest two-wheeler markers—Hero MotoCorp Ltd. and Bajaj Auto Ltd.—fell 11% and 3.6%, respectively, as demand in the hinterland failed to take off, with higher fuel prices increasing ownership costs. Rising input costs, too, forced companies to hike prices, impacting sales. Net profit of the two firms declined 17% and 9.6%, respectively.

Information Technology

  • Aggregate revenue of IT firms of the Nifty 50 Index rose 2.7% sequentially compared to 4.4% in the third quarter, as most companies won deals amid improved growth visibility going forward. Increased headcount addition points to assured growth momentum. Motilal Oswal expects the sector to grow in the mid-teens for FY22.

  • Infosys Ltd.’s revenue rose 1.5% quarter-on-quarter but operating income and net profit fell.

  • Tata Consultancy Services Ltd.’s revenue rose for the third-straight quarter as clients continued to spend on digital services amid the pandemic and robust deal wins.

  • Wipro Ltd.’s revenue grew 3.7% amid increased traction in digital-oriented and other strategic deals.

  • HCL Technologies Ltd. booked the most deals, valued at $3.1 billion, but its profit tumbled 72% quarter-on-quarter amid higher tax expenses.

Oil And Gas

  • Aggregate revenue and net profit grew 19.2% and 93.6%, respectively, on a sequential basis. Earnings of oil marketers like Bharat Petroleum Corp. and Indian Oil Corp. were led by higher inventory gains and refining margins, and improved performance of their petrochemical segments.

  • Reliance Industries Ltd.’s revenue and net profit grew 24.5% and 0.7%, respectively, aided by its oil-to-chemicals and retail segments. While the O2C segment was helped by higher polymer prices, improved transportation fuel cracks and increased refining margins, record revenues in grocery, lifestyle and fashion units buoyed its retail segment.


  • Combined revenue and profit of the healthcare universe of the Nifty 50 Index fell 5% and 23.6%, respectively, over last quarter—pulled down by earnings of Sun Pharmaceutical Industries Ltd. and Cipla Ltd.

  • While Sun Pharma’s net profit fell 52% because of falling sales and lower other income, its U.S. arm reported an operating loss. Cipla’s profit declined 45% as demand for its Covid-19 drugs fell before the pandemic’s second wave.

  • Divis Laboratories Ltd.’s profit rose 7%, aided by growth in its nutraceuticals business and new product additions.

Construction (Cement And Steel)

  • Aggregate revenue of cement and steel makers rose 22% over the last quarter in the three months through March compared with 11.4% in the third quarter. “The growth in cement sales was backed by a pick-up in infrastructure activities, particularly in the residential real estate segment, including affordable housing,” CARE Ratings Ltd. said in a recent report. “Steel prices of both hot-rolled coil and TMT were around 40-50% higher year-on-year in March 2021. Also, the improved demand and softer coking coal prices led to improvement in profits in the iron and steel companies.”

  • Ultratech Cement Ltd.’s net profit rose 12% quarter-on-quarter helped by better-than-expected volume growth, improved realisation, and cost cuts. Shree Cement Ltd.’s bottom line grew 26.5% sequentially, aided by higher realisation, increased volumes and demand recovery.

  • JSW Steel Ltd.'s profit jumped to the highest in at least 12 quarters amid rising domestic demand, supplemented by exports and improved steel prices. On the other hand, Tata Steel Ltd.’s net profit jumped 79% quarter-on-quarter helped by rising domestic sales and higher prices of hot-rolled coil steel.


  • Aggregate total income and net profits of the six banks in the Nifty 50 universe grew 5.9% and 2.5% quarter-on-quarter, respectively, as interest expenses and provisions fell.

  • ICICI Bank Ltd.’s total income rose 7.8% helped by higher interest income and retail loans. Its private peer Axis Bank Ltd. posted higher-than-expected profit as its net interest and fee incomes grew. HDFC Bank Ltd.’s net profit was below estimates even as other income rose and asset quality remained stable.

  • State Bank of India’s profit rose above estimates, helped by higher other income and lower provisions. Its gross and net non-performing asset ratios fell.


  • Revenue and net profit growth of consumer goods firms in the Nifty 50 Index rose 1.2% and 5.1%, respectively, over last quarter. Both the metrics rose for Hindustan Unilever Ltd., Nestle India Ltd., and ITC Ltd. during the quarter.

  • HUL’s performance was boosted by increased volumes and growth in its home care, beauty and personal care, and foods and refreshment segments.

  • Nestle India’s sales grew in double digits, supported by its e-commerce channel. Sequential recovery across segments—including cigarettes, hotels and paperboards—helped ITC.

  • Britannia Industries Ltd.’s net profit fell after six quarters amid rising input costs and a shutdown that was necessitated to implement three digital projects.


  • Removal of interconnection usage charges hit revenues and average revenues per user of Bharti Airtel Ltd. and Reliance Jio Infocomm Ltd.

  • While Bharti Airtel’s revenue and ARPU fell 2.3% and 12.6% sequentially, it added 1.4 crore 4G subscribers and 6 lakh post-paid users. The company expanded its market share across segments, including business in-home services, enterprise, payments bank and digital.

  • Reliance Jio’s revenue and ARPU reported quarter-on-quarter decline of 6% and 9%, respectively. It, however, added 1.5 crore net subscribers and had positive free cash flow in FY21 despite an outflow of Rs 15,000 crore for spectrum.

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