Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Charts & Analysis

Nifty Companies Q2 Growth Slows; Pales in Comparison to Q1 Growth Levels

Interesting last few weeks for us at Capital Mind. With companies announcing their Q2 earnings since early October, we have been tweeting some important and fascinating results via our official Twitter handle (@Capitalmind_in). And this is set to continue! Plenty more announcements are to follow over the next few weeks, and we shall look at them closely and will definitely have some intriguing trends to share with you all.

One such trend we found interesting this week, is that of the Nifty stocks. So far, 37 of the 50 Nifty companies have released their Q2 results. A few surprises did spring up. We performed an analysis of each quarter’s results, and compared it to the corresponding quarter’s results in the previous year.

We’ll write in some more detail about Banks in context of the Bank Nifty in a separate post.

Nifty Results So Far

Nifty-Stocks_Q2 Analysis

  1. ACC had positive Revenue Growth in Q1 and Q2 (7.3% and 9.5%), but showed a contrast in EPS growths: 7.1% reduction in Q1 FY15, but a whopping 61.9% increase in Q2.
  2. Echoing similar positive reversals of fortune, were GAIL and UltraTech Cement.
  3. Bajaj Auto reported a 29.4% EPS reduction in Q2, despite revenues increasing by 15.2%. A look at their financials revealed this to be due to an exceptional expense of Rs. 340.29 cr., without which they would’ve seen Profit Before Tax (PBT) reduce by 3.31% only.
  4. In the IT sector, EPS growth rates of HCL Infotech and Infosys continued to be strong.
  5. The Pharma sector saw Lupin and Dr. Reddy’s exhibit contrasting fortunes.

 Let’s look at the growth of Revenues and Net Profits of all the Nifty stocks put together, on a year-on-year basis for each quarter.

Nifty-Stocks_Growth Rates Analysis

As we can see for June 2014 (Q1), on a year-on-year basis, the 50 Nifty companies saw a 18.15% increase in their Q1 revenues, while Net Profits grew by 18.39%.

Contrastingly, for September 2014, the total revenues grew by only 3.70% on a yearly basis. Net Profits grew by 5.17%; a measly growth rate compared to the 18.39% that was seen in Q1.

Even though the remaining 13 companies are yet to announce their results, we can safely assume that the growth rates are not going to be anywhere close to the Q1 rates. An underwhelming performance by the Nifty companies that showed so much promise in Q1.

divider

Subscribe to Capital Mind:

To subscribe to new posts by email, once a day, delivered to your Inbox:

 

Also, do check out Capital Mind Premium, where we provide high
quality analysis on macro, fixed income and stocks. Also see our
portfolio which has given stellar returns in our year, trade by trade
as we progress. Take a 30-day trial: