Q1 Earnings Preview: 4 companies including Grasim, BPCL likely to post double-digit fall up to 71% in net profit

While most companies are expected to show moderate earnings growth in the June quarter, the brokerage has identified four firms that are likely to report a double-digit decline in their net profit for Q1FY25. Let's delve into the details.

Pranati Deva
First Published10 Jul 2024, 04:43 PM IST
Q1 Earnings Preview: 4 companies including Grasim, BPCL likely to post double-digit fall up to 71% in net profit
Q1 Earnings Preview: 4 companies including Grasim, BPCL likely to post double-digit fall up to 71% in net profit(Pixabay)

In its recent earnings preview for the June quarter (Q1FY25), domestic brokerage Motilal Oswal Financial Services (MOFSL) forecast a 4 percent year-on-year (YoY) growth in Nifty50 earnings. Excluding global commodities like Metals and Oil & Gas (O&G), the Nifty is expected to see a 10 percent YoY earnings growth for the quarter. Sales and EBITDA for Nifty are projected to increase by 6 percent and 4 percent YoY, respectively. Excluding Oil Marketing Companies (OMCs), the Nifty's EBITDA is expected to grow by 8 percent YoY.

MOFSL predicts that overall earnings growth will be primarily driven by domestic cyclicals, particularly the Banking, Financial Services, and Insurance (BFSI) and Auto sectors, with significant contributions from Metals and Healthcare.

Also Read | TCS Q1 result tomorrow: Margin may remain under pressure

While most companies are expected to show moderate earnings growth in the June quarter, the brokerage has identified four firms that are likely to report a double-digit decline in their net profit for Q1FY25. Let's delve into the details.

Grasim Industries: According to MOFSL, Grasim is likely to post a 71.4 percent YoY decline in its net profit at around 100 crore versus 360 crore in the same quarter last year. However, its net sales are expected to jump 10.7 percent YoY to 69,000 crore from 62,400 crore in the year-ago period. The brokerage estimates Grasim's revenue for the VSF and Chemical segments to increase by 6 percent and 5 percent YoY, respectively. Meanwhile, the EBITDA for the VSF segment is projected to grow by 22 percent YoY, with an operating profit margin (OPM) improvement of 1.6 percentage points to 12.5 percent. In contrast, the Chemical segment's EBITDA is expected to decline by 17 percent YoY, with an OPM contraction of 3.5 percentage points to 13.2 percent, it added.

Also Read | Q1 results preview: Real estate sector likely to post healthy growth in bookings, says MOSL

BPCL: MOFSL expects the OMC to post a 68.8 percent YoY fall in its net profit at 3,300 crore for Q1FY25 as against 10,550 crore in the same quarter last year. Meanwhile, its net sales are also likely to decrease 10.1 percent YoY to 1,01,540 crore in the quarter under review from 1,12,980 crore in the year-ago period. The brokerage predicts a refinery throughput of 10.3mmt and a reported GRM at USD8/bbl, with a blended gross marketing margin of 4/litre. It also estimates marketing sales (excluding exports) volumes of 13.3mmt (+4% YoY and 1%QoQ) during the quarter. Watch out for updates on the expansion of Bina refinery and construction of the new petrochemicals plan, it added.

JSW Steel: According to the brokerage, the net profit of the steel firm is likely to tank 38.3 percent YoY to 1,300 crore for Q1FY25 versus 2,300 crore in the same quarter last year. Meanwhile, MOFSL forecasts its net sales to be flat at 42,200 crore in the quarter under review. It expects the company's QoQ margin improvement to be driven by coal cost moderation. Performance of domestic and overseas subsidiaries will be crucial as well as management commentaries on capex/timelines, stated the brokerage.

Also Read | Q1 earnings preview: These 4 companies may post over 40% jump in net profit

Tech Mahindra: MOFSL estimates the net profit of the IT company to fall 14.4 percent YoY to 800 crore for Q1FY25 versus 1,000 crore in the same quarter last year. Meanwhile, its net sales are also set to decline 1.5 percent YoY to 13,000 crore in the quarter under review from 13,200 crore in the year-ago period. Dollar revenue is expected to be muted, up 0.4 percent at $1,554 million as against $1,601 million last year. As per the brokerage, the communications vertical for the firm has bottomed out, and recovery could take longer. It further noted that deal wins are likely to be muted due to macro uncertainty and expects deal TCV to the tune of $500 mn in 1Q. Also, the margin is likely to improve slightly by 30bp QoQ, as the impact of cost-control efforts should start becoming visible, but it noted that weak growth is likely to keep margins under pressure. The outlook on margin and growth in the CME and BFS verticals will be the key monitorables, added MOFSL.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess

News in Numbers

Numbers that help you understand news better
₹588.25 Cr

₹20,000 Cr

7.93 Cr

₹8,943 Cr

20 Yrs

First Published:10 Jul 2024, 04:43 PM IST
HomeMarketsStock MarketsQ1 Earnings Preview: 4 companies including Grasim, BPCL likely to post double-digit fall up to 71% in net profit

Most Active Stocks

Tata Steel

167.05
03:57 PM | 16 JUL 2024
0.25 (0.15%)

Oil & Natural Gas Corporation

322.40
03:58 PM | 16 JUL 2024
-0.15 (-0.05%)

Bandhan Bank

198.30
03:41 PM | 16 JUL 2024
2.95 (1.51%)

Coal India

512.35
03:59 PM | 16 JUL 2024
14.4 (2.89%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Natco Pharma

1,281.05
03:59 PM | 16 JUL 2024
73.2 (6.06%)

Century Textiles & Industries

2,217.55
03:48 PM | 16 JUL 2024
116.85 (5.56%)

Tata Teleservices Maharashtra

81.33
03:54 PM | 16 JUL 2024
4.23 (5.49%)

India Cements

323.05
03:55 PM | 16 JUL 2024
15.8 (5.14%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    75,246.00928.00
    Chennai
    75,099.00344.00
    Delhi
    74,806.00-460.00
    Kolkata
    75,466.00419.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.76/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanMint Shorts