 "India Inc put on a disappointing show during the second quarter of financial year 2025 (Q2FY25), with earnings posted by most companies falling short of Street expectations.")
India Inc put on a disappointing show during the second quarter of financial year 2025 (Q2FY25), with earnings posted by most companies falling short of Street expectations.
However, not all sectors have fared badly. In a report, JM Financial tried to separate the wheat from the chaff by analysing sector-wise performance.
The study showed almost all microfinance institutions (MFIs) and companies in the oil refining & marketing space have missed estimates. On the other hand, companies in the commodities space and state-owned banks have largely surpassed estimates. Overall, 45 per cent of the companies analysed by the brokerage have failed to meet expectations.
“We have analysed the results of 227 companies (out of the 275 company JM Financial coverage universe) and conclude that 45 per cent of companies have missed estimates. There is a slowdown in urban demand across FMCG, retail, auto and mall operators. Besides this, chemicals, consumer durables and building materials have seen a moderation in demand. MFIs, select private sector banks and NBFCs are witnessing stress in their unsecured book,” it observed in a note.
The note further said two thirds of the companies have seen downward revision in earnings estimates, while nearly half have seen a cut in their target price post Q2FY25. The earnings cut in the mid-and small-cap space has been higher than that in the large-cap space, said JM Financial.
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 "Commercial banks have turned cautious in lending to smaller microfinance institutions (MFIs), which has compelled the latter to borrow from non-banking financial companies (NBFCs) at much higher rates.")
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