How did India Inc fare in Q2FY23?

The July-September corporate results of FY23 are in their last leg as India Inc moves past another quarter of uncertainty and high inflationary pressures. 

The earnings show for the recent quarter was a mixed bag, as per experts. Though the results largely came in line with what the Street had expected, they say.

Amit Kumar Gupta, Founder and CIO, FinTrekk Capital says, Q2FY23 results came in line with lowered estimates. Heavyweights RIL, TCS, HDFC, Infy delivered expected results. 70% of cos so far have met or slightly exceeded expectations/ 

Within sectors, analysts say, global commodity-based industries were the biggest drags during the quarter.

As per Motilal Oswal, the profits of 32 Nifty companies slipped 2% year-on-year, led by global cyclical industries such as metals and oil and gas. 

Excluding these, it estimates, the profits grew 25% YoY led by the BFSI pocket.

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services says, excellent performance delivered by banks and auto cos. Premium segment within auto did especially well. IT results came on expected lines amid tech demand slowdown worries. Commodities disappointed led by metals, oil and gas, cement. Pharma outstood strong results from select companies like Sun Pharma. 

That said, in the broader market, earnings beats and misses have been evenly poised for the Nifty 200 index so far, according to analysts.

For instance, as per ICICI Securities, around 20 earnings beat from the Nifty midcap 100 index have firmly cushioned against 15 earnings misses from the Nifty Next50 index.

Besides, going forward, analysts expect FY23 Nifty earnings to be impacted due to continued rate hikes over the next few quarters.  

Speaking to Business Standard, Amit Kumar Gupta, Founder and CIO, FinTrekk Capital says, Nifty may miss earnings estimates for FY23, and expects FY23 profit to be lower amid rising rates. Margin pressure to remain despite likely uptick in profits. He sees Nifty EPS likely at 820-830 levels.

Motilal Oswal also sees limited upside to the Nifty index in the near term as it is now trading at around 22 times its FY23 earnings, 13% above the 10-year historical average.  

Markets will track global cues for direction today. The Street will also react to Tuesday’s Q2 results of Jubilant Food, Godrej Consumer and Bajaj Electricals, among others.