Q4 results preview: From Maruti Suzuki to Grasim, 5 stocks are likely to post 45% rise in YoY net profit
As Q4FY24 earnings season begins, Motilal Oswal estimates Nifty earnings to grow 6% YoY. Among stocks, the brokerage expects 5 Nifty50 constituents to witness over 45 percent surge in their net profit on a year-on-year (YoY) basis in Q4FY24. Let's take a look at these stocks:
As the March Quarter (Q4FY24) earnings season is set to begin, brokerage house Motilal Oswal (MOSL) estimates Nifty earnings to grow 6 percent year-on-year (YoY) in the quarter under review. Margin tailwinds are likely to narrow due to a high base, it noted. EBITDA margin (ex-financials) is projected to remain flat for the Nifty at 19.8 percent (+10bp), further estimated the brokerage.
"Overall earnings growth is anticipated to be driven, once again, by domestic cyclicals, such as Auto and BFSI, which are expected to post 20 percent and 15 percent YoY growth, respectively. Conversely, earnings growth is expected to be weighed down by global cyclicals, such as Oil & Gas and Metals, which are anticipated to decline 6 percent and 12 percent YoY, respectively," it forecasted.
MOSL's FY24 Nifty EPS remains stable at ₹980, while the FY25 EPS has witnessed a cut of 1 percent to ₹1,132. It expects the Nifty EPS to grow 21 percent and 16 percent in FY24 and FY25, respectively.
Among stocks, the brokerage expects 5 Nifty 50 constituents to witness over 45 percent surge in their net profit on a year-on-year (YoY) basis in Q4FY24. Let's take a look at these stocks:
Maruti Suzuki: MOSL sees a 51.4 percent surge in the YoY net profit of the auto major to ₹3,973 crore as against ₹2,623 crore in the same period last year. Net operating revenue is also likely to jump 21.5 percent to ₹38,947 crore from ₹32,048 crore last year. It further noted that volume growth of 13 percent YoY will be driven by visible traction in UVs (71 percent YoY growth) even as entry-level models declined 28 percent YoY.
Meanwhile, its EBITDA margin is likely to expand 110bp QoQ to 12.8 percent, due to stable raw material costs, improved mix, and operating leverage benefit, it added. MOSL has also raised FY25E EPS by 9 percent to account for higher volumes and a better mix.
Shriram Finance: The brokerage expects a 49.3 percent rise in the YoY net profit of the NBFC in Q4FY24 to ₹1,953 crore as against ₹1,308 crore in the corresponding period last year. Net interest income (NII) for the NFBC is also estimated to grow 22.1 percent to ₹5,105 crore versus ₹4,181 crore in Q4FY23. MOSL further estimates disbursements of ₹40,300 crore, leading to an AUM (assets under management) of ₹2.26 lakh crore (up 22 percent YoY/ 6 percent QoQ).
Meanwhile, credit costs are likely to decline 15 bps QoQ to 2.2 percent and Margin is expected to contract 15 bps QoQ to 9.3 percent, it projected. Commentaries on loan growth in CV and on asset quality in 2W and PL segments are the key monitorables, added the brokerage.
Grasim Industries: The net profit of the bluechip firm is likely to soar 80 percent YoY to ₹170 crore in Q4FY24 as against ₹90 crore in the corresponding period last year, but 29 percent QoQ due to higher tax. However, its net sales are expected to decline 3.2 percent to ₹6,430 crore as against ₹6,750 crore in Q4FY23. MOSL also forecasts the firm's Standalone EBITDA to grow 20 percent YoY to ₹500 crore and operating margin (OPM) is estimated to increase 1.6 percentage points YoY to 8 percent. MOSL expects revenue for the VSF (viscose staple fibre) segments to decline 1 percent YoY, while for the Chemical segment, it is expected to drop 15 percent YoY.
Meanwhile, the EBITDA for the VSF segment is expected to grow 166 percent YoY, and OPM is expected to increase 6.5pp YoY to 10.3 percent. Also, the Chemical segment’s EBITDA is expected to decline 19 percent YoY, and OPM should contract 80bp YoY to 14.6 percent, it predicted.
Apollo Hospitals: The hospital firm is likely to report a 45.4 percent rise in its YoY net profit in Q4FY24 to ₹250 crore versus ₹104 crore in the same period last year. MOSL predicted that its Sales and EBITDA are expected to grow 14 percent and 25 percent YoY to ₹2500 crore and ₹600 crore, respectively, due to improved average revenue per occupied bed (ARPOB) and Healthco operations.
With enhanced footfalls in primary care/Diagnostics and improved operational efficiencies, Apollo is expected to register 15 percent and 37 percent YoY growth in Revenue and EBITDA. Watch out for the GMV outlook in Apollo 24/7, said MOSL, adding that Updates on capacity expansions at Pune, Hyderabad, Kolkata and Bengaluru are the key monitorables.
Dr Reddy's Labs: MOSL expects the pharma firm to post a 51.7 percent increase in its YoY net profit to ₹1,224 crore in Q4FY24 versus ₹959 crore in the same period last year. Meanwhile, its total sales is also likely to rise 16.9 percent to ₹7,055 crore versus ₹6,032 crore last year. The brokerage expects the US sales to grow 32 percent YoY to $412 million; with strong traction likely in the existing portfolio and niche launches. It also predicts sales of Russia/other CIS countries to rise 11 percent YoY to ₹830 crore led by new launches and favorable currency while India revenue to grow 9 percent YoY.
Strong traction in Pain/Derma/Anti-Diabetic is expected to be offset by a double-digit decline in cardiac therapy, it added. Watch out for key approvals and launches in North America over the next 12-15M and GLP1 opportunity. Updates on filings, approvals and launches in China are the key monitorables, said MOSL.
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.
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