Moneycontrol
Last Updated : Aug 19, 2018 09:41 AM IST | Source: Moneycontrol.com

Q1 report card: High-caps outperform in terms of growth as well as margins

In general, 68% of companies have reported sales along the estimates or better than estimates and on the net profit side, 78% of companies have posted Net Profits better than or along the estimates.

Moneycontrol Contributor @moneycontrolcom

Vineeta Sharma

Narnolia Financial Advisors

Aggregate sales of 456 companies of BSE 500 is reported at Rs 16.81 akh crore as compared to Rs 14.40 lakh crore in Q1 FY18, which implies a growth of 16.8 percent. The gross net profit for these companies aggregates to Rs 1.24 lakh crore in Q1 FY19 vis a vis 1.15 lakh crore in Q1 FY18 implying an aggregate growth of 7.9 percent YoY.

Median sales growth and PAT growth of all such companies taken together is 13.9 percent and 20.2 percent respectively. Median sales growth for large-cap companies has been reported at 13.6 percent and median PAT growth for large-cap companies is at 24.5 percent, while the median sales growth for mid and small-cap companies is 13.9 percent and median net profits growth of mid and small-cap companies is 19.1 percent YoY.

In general, 68 percent of companies have reported sales along the estimates or better than estimates and on the net profit side, 78 percent of companies have posted Net Profits better than or along the estimates.

Sectors that have reported better numbers are- auto components, energy, materials, healthcare and media while there were disappointments from PSBs, telecom, automobiles, construction materials, utilities and construction & engineering.

Automobiles have struggled on the margins due to increased competitiveness and higher material prices but volume growth remains. Though PSUs net profits were lower than expectations, the core pre- provisioning profit grew by average 19 percent.

Also, the management commentary post this quarter numbers gives confidence of NPA cycle peaking up in near term and health of the PSBs should be recovering by end of FY19.

Consumer staples have reported numbers better than expectations and the volume growth was visible though on a lower base. IT sector showed improvement on margins aided by rupee depreciation. Materials reported healthy numbers owing to favorable commodity prices.

Healthcare revenues and profits have improved on a lower base. Construction and engineering segment have hinted of slow execution going forward on account of delays in financial closures of project and this should revive from second half of the FY19.

To conclude, this earning season has set a strong base for healthy growth in Indian corporate businesses going forward.

(Disclaimer: The author is Head of Research- Narnolia Financial Advisors. The views and investment tips expressed by investment experts/broking houses/rating agencies on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions)
First Published on Aug 19, 2018 09:41 am
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