Q1 Earnings: EPS Estimates Of Nifty Companies Cut Further

Analysts have further lowered the earnings per share estimates of Nifty companies for the quarter ended June.

Before the first-quarter earnings season kicked off on July 10, EPS estimate was cut 8 percent to Rs 123.7 from Rs 134.8 as of April, data compiled by BloombergQuint showed.

After 12 of the 50 Nifty companies announced results, analysts have lowered the forecast to Rs 121.6 as on July 23—about 10 percent lower than what they expected at the start of the financial year.

The combined EPS forecast of the 12 Nifty companies is at Rs 35.2. This is slightly lower than the estimated Rs 36.2 as on July 10.

Of the 12, three have beaten estimates, six have reported numbers in line with forecast and three have missed forecast.

Here are some key points from the companies that managed to beat estimates

TCS

• Large deals signed in the fourth quarter of the previous financial year and during the first quarter of the ongoing fiscal boosted the banking and financial services vertical (constant currency growth of 3.7 percent).
• Cost efficiencies, currency tailwinds helped counter adverse impact of salary hikes.

Bajaj Finserv

• The general insurance and lending businesses aided performance.
• The life insurance business was under pressure despite improving persistency ratios.

Wipro

• A recovery in the company’s banking and financial services vertical.
• The company’s IT services revenue guidance was higher-than-estimated.

Key points from the companies that missed estimates

Kotak Bank

• The bottom line missed forecast owing to a huge jump in provisions during the quarter.
• The gross non-performing asset ratio rose marginally, and loan growth was at 24 percent.

Bajaj Auto

• The rising commodity prices and a weak product mix impacted results.
• Product price cuts impacted the company’s margins.

HDFC Bank

• The net profit missed estimates on a mark-to-market hit of Rs 390 crore.
• Profit growth fell below 20 percent in the reporting quarter.