Wondering which stock will outperform in Q1? Morgan Stanley lists out 4 stocks which could double PAT

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26 Aug, 2025 12:21

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India Inc. will kick start declaring their results for the quarter ended June 30 this week. The revenue growth of the Morgan Stanley’s universe of 122 companies is likely to grow 12 percent while the net profit could degrow by 1 percent on a year-on-year (YoY) basis.

The global investment bank expects YoY margin compression of 214bps. For Sensex companies, it expects revenue and profit growth of 8 percent YoY and 4 percent YoY in QE June 2017.

According to analysts at Morgan Stanley, Tata Steel, Dr Reddy's Labs and Tata Motors will likely see the fastest net profit growth, while Bharti Airtel, Sun Pharma and Lupin should be the laggards.

Tata Motors and Tata Steel should be the biggest positive contributors to Sensex earnings. The global investment bank highlights four stocks which could more than double its net profit in last one year include names like Canara Bank, Dr Reddy’s Laboratories, Tata Steel and Vedanta.

What has driven Morgan Stanley expectation for the quarter?

a) De-stocking (and price discounts) ahead of GST roll-out for domestic industries, especially consumer staples and discretionary.

b) Lagged impact of higher commodity prices leading to higher costs.

c) Earnings to remain weak for corporate and PSU banks, while retail banks & NBFCs are likely to fare better

d) Inventory losses due to lower oil prices for oil PSUs.

e) Persistent competitive intensity for telecom companies.

f) Firm prices buthigh costs for cement companies.

g) Weaker realizations for steel companies.

h) Lower volume off-take and higher costs for aluminium companies.

i) YoY revenue and earnings weakness for technology even as currency tailwinds from INR appreciation could lead to FX gains.

The global investment bank further added that growth is in a U-shaped recovery, driven by domestic and global factors. “We expect earnings revision breadth to improve in the next few months. We expect Sensex earnings growth of 18 percent in F2018 and 24 percent on a YoY basis in F2019,” it said.