Q1 Nifty Scorecard: Most Companies Missed Estimates So Far
A person tries to hit a target. (Photographer: George Frey/Bloomberg)

Q1 Nifty Scorecard: Most Companies Missed Estimates So Far

The number of Nifty companies that missed estimates halfway through the June quarter earnings season rose to the highest in at least two years as lower demand for shampoos to cars, higher provisions by banks and fluctuations in the rupee dragged their financials.

Of the 32 Nifty constituents that have announced their June quarter results, 17 missed estimates, the most since at least September 2017, data compiled by BloombergQuint showed. Only four companies managed to beat estimates—also the lowest in at least two years—while 11 met forecasts.

“The Nifty companies’ results so far indicate first quarter earnings per share growth of only 5 percent year-on-year, which is in contrast with the steep 20-30 percent growth rates built into consensus expectations for FY21,” Sunil Tirumalai, analyst at Emkay Global Financial Services Pvt. Ltd., said in a note.

UBS India’s Research Head Gautam Chhaochharia, who has been forecasting “earnings disappointments” for the last five years, said the Nifty earnings estimates are likely to be cut by another 10 percent. “The demand slowdown was clearly reflected in autos and consumer staples as expected, while bad loan risks have risen for banks,” he said in a report.

The 32 companies reported a combined EPS of Rs 84.8 in Q1. That compares with the consensus estimate of Rs 88.7. The EPS forecast for all the 50 companies at the start of first quarter was Rs 121.1.

Mahesh Nandurkar, India strategist at CLSA, however, said early trends from Q1 results indicate that the consumption slowdown is not too deep at the moment with a few consumer companies reporting good numbers. The management commentary and results of HDFC Bank Ltd. and Bajaj Finance Ltd. though raise eyebrows on the outlook for retail lending businesses, he said in a note.

Here’s how the sectors have fared so far...

Q1 Nifty Scorecard: Most Companies Missed Estimates So Far


  • Higher costs hurt operational performance of UPL Ltd.
  • UPL maintains FY20 guidance, expects large part of the growth to be back-ended.


  • Loss of Tata Motors Ltd. widened as sales and margin of its luxury brand Jaguar Land Rover Automotive Plc fell.
  • No guidance for Maruti Suzuki India Ltd. due to uncertainties in short term.
  • Recent price hikes aid overall operating performance for Hero MotoCorp Ltd.
  • Eicher Motors Ltd. missed estimates on lower Royal Enfield volumes and realisations; heavy discounting in trucks segment impacted margins.


  • Higher financial and material costs hurt earnings of infrastructure companies.
  • Larsen & Toubro Ltd. maintained guidance but expects subdued private sector capex in the next few quarters.

Fast-Moving Consumer Goods

  • Hindustan Unilever Ltd.’s volumes growth fell to lowest in seven quarters.
  • Asian Paints Ltd. reported strong double-digit volume growth in domestic decorative paints business.
  • ITC Ltd.’s cigarette volumes disappointed despite favourable base.
  • FMCG firms expect recovery in the second half of the ongoing financial year.

Oil & Gas

  • Reliance Industries Ltd.’s refining segment outperformed on higher volumes; petrochemical segment struggled due to lower product spreads.
  • Indian Oil Corporation Ltd. witnessed inventory gains against expectations of a loss, strong refining performance aided first-quarter earnings.

Financial Services

  • Poor asset quality and higher slippages hurt banks’ earnings.
  • Cautionary stance in few segments for Bajaj Finance.
  • Yes Bank Ltd.’s gross slippages jumped twofold.
  • Higher provisioning in agricultural sector for HDFC Bank.
  • Kotak Mahindra Bank Ltd.’s subsidiaries underperformed.
  • ICICI Bank Ltd. offered no guidance for loan growth.
  • Higher provisioning weighed on profits for Axis Bank Ltd.

Information Technology

  • Stronger rupee, higher wage and visa costs during the June quarter hurt earnings of software services providers.
  • Tata Consultancy Services Ltd. reported lowest margins in eight quarters.
  • Infosys Ltd. raised full-year revenue guidance to 8.5-10 percent from 7.5-9.5 percent.
  • Business seasonality affected Tech Mahindra Ltd.’s revenue and margin.
  • Wipro Ltd.’s profit fell and margins; company offered weak guidance for the fiscal.


  • Lower-than-expected operational performance of zinc and aluminium divisions weighed on Vedanta Ltd.
  • JSW Steel Ltd.’s profit fell by half as operating margin narrowed.




Click here to track BloombergQuint’s coverage of Q1 results.

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