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Charts & Analysis

Chart: Nifty Company Results Show Abysmal Profit Growth Even as Banks and Auto Shine

Out of the 50 Nifty companies, 33 have declared results and the status looks quite depressing. Aggregate profits of the Nifty companies are up just 2.5% (if you added them all up), and revenues are down.

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The biggest performer, Vedanta (previously Sesa Sterlite) is up so much because of a 2,200 cr. book entry for depreciation adjustments in June last year. If you ignored that, Vedanta would show profits have fallen. And if you ignored Vedanta entirely, you get a 1.45% growth in overall profits.

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This is low but a few notes:

  • Cement companies have fallen off a cliff, apparently. Look at the results of ACC, Ambuja Cements and Ultratech
  • Banks are relatively okay, though Kotak had a hit due the ING Vysya Bank acquisition, and Punjab National Bank was just behaving like a Public Sector Bank
  • IT companies have only shown single digit profit growth. HCL Tech was the exception and if you look above you’ll know why not to rejoice.
  • Pharma companies have surprised on the downside and Auto companies on the upside; Hero Motocorp showed 33% profit growth today.

Overall, the figures aren’t impressive and  we have a lot of results yet to come. After Airtel’s release tomorrow, there are BHEL, Grasim, M&M and Tata Motors on Friday, and the rest go into the next week. Airtel’s likely to be only saving grace; and this performance is not what we have overpaid this index for.

  • pankaj says:

    Hi,
    Thanks for analysis. 1 basic qn: The way short term/ medium term traders, ignore intraday price fluctuations, shouldn’t long term investors with horizon of 10 years+, ignore qtrly results? (may refer only to annual performances) Or if you can tell reason why every qtrly result wud be relevant for them as well.
    regards,