The start to Q3 result is good and in-line with the expectations. Q3 is likely to provide a push to earnings growth trajectory of FY20 and 21, said Vinod Nair at Geojit Financial Services.
Indian market witnessed mild profit-taking at higher levels as the Sensex hit a fresh record high of 42,063 on January 17, but failed to hold onto gains and closed below 42,000. It rallied about 1 percent for the week.
For the week ended January 17, the S&P BSE Sensex rose 0.83 percent while the Nifty50 ended with gains of 0.78 percent.
Broader markets outperformed as the S&P BSE Mid-cap index was up 3.6 percent, and the S&P BSE Small-cap index closed with gains of 3.97 percent for the week ended January 17.
Experts feel that a decisive break above 12,400 in Nifty would trigger the next directional move. Market participants will react to heavyweights like Reliance Industries, TCS and HCL Tech results in early trade on January 20.
For time being traders are advised to make use of weakness below 12,300 to create short positions rather than buying dip, suggest experts.
The start to Q3 result is good and in-line with the expectations. The FMCG sector is likely to see a robust growth due to lower cost and demand supported by normal monsoon.
The oil & gas sector is likely to be mixed with good numbers from oil marketing companies while a mute performance from exploration. IT sector is likely to be flattish on account of slowdown in the banking and global demand.
On the other hand, sectors such as auto, metals, telecom and others will be negative to flat with mild improvement on a quarter-on-quarter (QoQ) basis. Overall, Q3 is likely to provide a push to the earnings growth trajectory of FY20 and 21, according to Vinod Nair, Head of Research at Geojit Financial Services.
Here are the top 10 companies which declared their December quarter numbers this week:
RIL Q3 profit grows 13.5% to Rs 11,640 cr
Reliance Industries, the country's largest company by market capitalisation, registered a 13.5 percent year-on-year (YoY) growth (3.35 percent QoQ) in third-quarter consolidated profit at Rs 11,640 crore, driven by strong growth in consumer businesses (telecom and retail).
It was also supported by lower tax cost and higher other income. Consolidated revenue from operations in Q3 rose 2.5 percent QoQ to Rs 1.57 lakh crore, but the same fell 2.5 percent YoY.
"The third-quarter results for our energy business reflects the weak global economic environment and volatility in energy markets. Within our O2C chain, downstream petrochemicals profitability was impacted by weak margins across products with subdued demand in well-supplied markets," Mukesh Dhirubhai Ambani, Chairman and Managing Director said.
Reliance Jio reported a whopping 36.4 percent sequential growth in Q3 profit at Rs 1,350 crore on revenue of Rs 13,968 crore, which grew 6.4 percent QoQ.
TCS Q3 profit grows 0.9%, dollar revenue growth at 1.3%
Tata Consultancy Services, the country's largest IT services company, January 17 registered a 0.94 percent sequential growth (up 0.16 percent YoY) in third-quarter net profit at Rs 8,118 crore, impacted by lower other income (down 40 percent QoQ).
Revenue in rupee terms grew by 2.3 percent QoQ (up 6.7 percent YoY) to Rs 39,854 crore for the quarter ended December 2019, while dollar revenue increased 1.3 percent sequentially to $5,586 million amid seasonally weak quarter, which missed the poll of analysts conducted by CNBC-TV18 that was pegged at 1.45 percent growth.
Wipro Q4 revenue forecast misses estimates, revenue rises 3%
The December quarter earnings of Wipro, the country's fourth-largest IT company by market capitalisation, matched analyst expectations with revenue rising 3 percent sequentially.
Dollar revenue grew by 2.2 percent and constant currency revenue growth stood at 1.8 percent QoQ during the quarter. Wipro expects constant currency (CC) revenue during the last quarter of FY20 to grow in the range of 0-2 percent compared to the third quarter.
In consumer vertical, the company grew 12.1 percent YoY in CC terms led by sustainable deals win. However, management expects the retail industry to continue to be choppy and volatile. The company has guided for 0 to 2 percent QoQ in CC terms building softness in renewals.
HCL Tech Q3 profit jumps 14% to Rs 3,037 cr
HCL Technologies beat street estimates to post 14 percent jump in third-quarter net profit at Rs 3,037 crore against Rs 2,651 crore in the quarter ended September 2019.
The rupee revenue of the company rose 3.5 percent to Rs 18,135 crore from Rs 17,527 crore, QoQ. The company's dollar revenue was at $2,543 million, up 2.3% QoQ and 15.5% YoY.
Earnings before interest, tax (EBIT) was up 5 percent at Rs 3,670 crore and EBIT margin was up at 20.2 percent. The constant currency revenue growth was at 2.1 percent, QoQ.
L&T Technology Services Q3 net profit up 10% at Rs 204 cr
IT company L&T Technology Services on January 17 posted a 10 per cent rise in consolidated net profit at Rs 204 crore during the quarter ended December 31, 2019 mainly on account of business growth in North America. The company had posted a net profit of Rs 185.6 crore in the same period a year ago.
"We had a strong performance in three segments - transportation, plant engineering, and medical devices that are each growing in excess of 20 per cent on year-on-year (YoY) basis. Digital and leading-edge technologies - the growth driver for ER&D ( Engineering and R&D), contributed to 41 per cent of third-quarter revenues and grew by 29 per cent YoY," L&T Technology Services (LTTS) CEO and Managing Director Keshab Panda said in a statement.
ICICI Lombard General Insurance Q3 net profit up 23%
Private non-life insurer ICICI Lombard General Insurance posted a 23 percent YoY rise in its December quarter net profit at Rs 294.11 crore. Gross domestic premium income (GDPI) of the Company remained flat at Rs 3,693 crore in Q3FY20 compared to Rs 3,699 crore in the year-ago period.
Excluding the crop segment, GDPI of the company showed an 8.3 percent YoY increase to Rs 3,672 billion in Q3 FY20. The industry growth (excluding crop segment) for Q3FY20 was 10.9 percent.
In the post-earnings call, Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance, said that there has been a pressure on the motor own damage (OD) segment ever since the long-term motor policies have been launched.
Cyient Q3 net profit up 17.6% to Rs 108.3cr
IT firm Cyient on January 16 reported a 17.6 percent rise in net profit at Rs 108.3 crore for the December 2019 quarter. The Hyderabad-based company had posted a net profit of Rs 92.1 crore in October-December quarter a year ago, Cyient said in a statement.
Its revenue, however, decreased 6.9 percent to Rs 1,106 crore for the period under review as against Rs 1,187.6 crore in the third quarter (Q3) of 2018-19. "PAT increased by about 10 percent quarter-on-quarter, primarily on account of higher other income," it said.
Bandhan Bank Q3 profit jumps 137%
Private sector lender Bandhan Bank reported strong profitability and NII growth in December quarter, but the report card had some red flags amid a sharp rise in NPA and the cost to income ratio along with lower NIM QoQ.
The bank registered a whopping 136.6 percent YoY growth in profit and 37 percent rise in net interest income, but sequentially net interest margin contracted to 7.9 percent (at an all-time low) against 8.2 percent and gross non-performing assets rose 20bps to 1.96 percent QoQ. Bandhan made an additional provision of Rs 200 crore for MFI book in Assam which forms 10 percent of the total loan book.
Sterlite Technologies Q3 net profit at Rs 91cr
Sterlite Technologies on January 15 reported a net profit of Rs 91 crore (excluding exception items) during December 2019 quarter. The company had registered a net profit of Rs 146 crore in October-December quarter a year ago, Sterlite Technologies (STL) said in a regulatory filing.
Its consolidated revenue stood at Rs 1,203 crore during December quarter as against Rs 1,335 crore in the corresponding quarter of 2018-19. The company's exceptional items stood at Rs 51 crore in the third quarter of 2019-20.
Karnataka Bank Q3 profit slips 12% to Rs 123 cr
Private sector lender Karnataka Bank on January 16 reported a 12 per cent decline in its net profit at Rs 123.14 crore for the third quarter ending December 31, 2019, on account of rising in bad loans. The Mangalore-headquartered bank had reported a net profit of Rs 140.41 crore in the year-ago period, the bank said in a regulatory filing.
However, the total income of the bank rose to Rs 2,023.68 crore from Rs 1,815.79 crore in the same quarter a year ago. The gross non-performing asset (NPA) of the bank rose to 4.99 per cent of assets from 4.45 per cent in the year-ago period.
Disclaimer: Reliance Industries Ltd, which also owns, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.