How have EPS estimates for Nifty 200 companies changed in Q3? Here are Ambit Capital's biggest movers

As the third-quarter earnings season drew to close, corporate performances for the October-December period reflected their fair share of hits and misses.

While improved margins remained the highlight for most Nifty 200 companies, not all performed equally well. Here are the biggest earnings-per-share (EPS) upgrades and downgrades among Nifty 200 companies according to research and broking firm Ambit Capital.

BPCL makes a roaring comeback

Bharat Petroleum Corporation Ltd (BPCL) led the list of stocks with the biggest EPS upgrades. Ambit Capital attributes BPCL's upgrade to favourable macros in Q3, resulting in marketing profits despite stagnant retail fuel prices. Additionally, analysts at Ambit Capital expect BPCL to become profitable due to a normalisation in the oil market in FY24.

Tata Motors came a close second, with analysts at Ambit Capital praising the better-than-expected average selling price at the company's luxury Jaguar-Land Rover (JLR) arm. Better-than-expected EBIDTA (earnings before interest, taxes, depreciation and amortisation) margin for the domestic commercial vehicle business as the industry shifts from demand-push to -pull mode, also drove the upgrades on the EPS front.

Ambit Capital also saw Tata Motors turning net debt-free by the end of FY25, with JLR benefiting from rising scale, better mix and working capital reversal. The India business is also expected to continue to benefit from an upcycle in the commercial vehicle segment and strong business momentum in passenger vehicles, according to the broking firm.

Even Oberoi Realty secured a seat in the list of biggest EPS upgrades for Q3, as its better revenue recognition amid multiple projects hitting completion milestones instilled optimism.

“With real estate sales momentum expected to continue for Mumbai Metropolitan Region-focused developers, Oberoi Realty is expected to benefit further amid expected launches in the coming quarters across locations,” the broking firm wrote in a report. Ambit Capital also raised its estimates for headline numbers of Oberoi Realty for the current financial year with better completion momentum and one-offs.

ACC and Dalmia Bharat, two companies from the cement space, also secured a place on the list. ACC's EBITDA margin was aided by lower-than-expected freight costs and higher fixed-cost absorption, while Dalmia Bharat's EPS upgrade was due to fuel cost savings.

All's not well for Zomato, Indus Towers

Zomato led the list of stocks with the largest EPS downgrades from Ambit Capital. The company's food delivery growth suffered due to weaker order volumes and maximum transaction unit growth, which clouded its prospects.

For Indus Towers, it was Vodafone Idea's funding constraints that weighed on the company's ability to grow dividends and triggered EPS cuts. Telecom companies' focus on loading and fabrication instead of new tower additions further dampened prospects for the mobile tower installation company.

Retailer Aditya Birla Fashion and Retail also made it to the list due to an increase in the company's marketing spends and losses in new businesses, according to Ambit Capital.

Lupin and Voltas were also downgraded. Lupin's EPS estimates were cut due to a delay in the approval of gSpiriva, its drug for treating chronic obstructive pulmonary disease, and the management's inability to meet cost-reduction targets. The delay in approval for gSpiriva was also a contributory factor to Lupin's weaker-than-expected earnings in Q3.

Unexpected exceptional losses in the third quarter led to EPS cuts for Voltas. Ambit Capital has also initiated coverage on Voltas recently with a sell recommendation due to the company's potential challenges with increased competition, supply chain shifts and transition to a manufacturing-cum-marketing brand.