Corporate India reported highest earnings growth in last four quarters: Motilal Oswal

Indian listed companies reported healthy profitability in fourth quarter of last financial year despite challenging global macro backdrop, brokerage firm Motilal Oswal said in its India Strategy report. companies tracked by Motilal Oswal reported highest earnings growth in last four quarters driven by strong performance by financials and autos while metals dragged aggregate profitability, report said.

companies under Motilal Oswal's Universe delivered sales growth of 24 per cent, EBITDA growth of 4 per cent and net profit growth of 4 per cent year-on-year (YoY) in FY23. 

"While Auto and BFSI were key growth drivers with 127 per cent and 64 per cent YoY earnings growth, global commodities such as metals and oil and gas were prime drag with 46 per cent and 20 per cent YoY earnings decline, respectively. Private Banks ded 122 per cent, public sector banks ded 115 per cent and autos ded 70 per cent to incremental profits, whereas Metals, Oil & Gas and Cement accounted for 232 per cent, 107 per cent and 15 per cent respectively to incremental earnings in FY23," Motilal Oswal said in its report.

India Inc Q4: Key sectoral highlights

Technology: IT companies reported a mixed performance overall in last quarter of previous financial year, with tier-1 firms delivering muted revenue growth and modest margins, while tier-2 companies outpaced tier-1 pack with stronger revenue growth. 

Banks: Banking sector reported a strong last quarter of financial year 2022-23, driven by healthy loan growth, stable margins, and continued asset quality improvements. re were numerous drivers of credit expansion, with retail and MSME sectors exhibiting robust growth and corporate book displaying a healthy rebound. 

Automobiles: Volumes grew YoY across segments, except two wheelers that remained flat due to a decline in exports. 

Performance highlights for Nifty constituents

• Sales of Nifty 50 companies grew at 13 per cent, EBITDA or operating profit vanced 12 per cent, profit before tax rose 13 per cent and profit after tax climbed 16 per cent in fourth quarter of previous financial year, Motilal Oswal noted
• Among Nifty constituents, 42 per cent companies reported better than expected net profit while 26 per cent missed expectations.
• Excluding Financials, profit for Nifty constituents rose 7 per cent YoY (est. 7 per cent growth)
• SBI, Tata Motors, BPCL, Reliance Industries, Axis Bank, ITC, HDFC, JSW Steel, Kotak Mahindra Bank, Bharti Airtel, Mahindra & Mahindra, Bajaj Auto, Asian Paints, Eicher Motors, Hero Motocorp, SBI Life, Nestle, and Britannia reported higher-than-estimated earnings. 
• While ONGC, Infosys, Coal India, Maruti Suzuki, Bajaj Finserv, Tata Steel, UPL, Dr Reddy’s Labs, Cipla, HDFC Life, Tata Consumer, Grasim Industries, and Apollo Hospitals missed Motilal Oswal's profit estimates estimates.

Eight Nifty companies saw an upgre of over 5 per cent in ir FY24 EPS estimates; while ten witnessed a downgre of over 5 per cent, according to Motilal Oswal