Corporate performance during the quarter ended September is likely to be mixed with sales turnover growing at a higher pace than net profit. The new profit growth is likely to slow down marginally compared with that of the quarter ended June this financial year.
A study by Motilal Oswal Securities of top 112 firms, including all Sensex companies, shows a 23.2 per cent growth in sales and a 5.7 per cent growth in net profit. Aggregate operating profit of the 112 firms is seen growing at 3.7 per cent with a margin of 330 basis points drop.
Oil and gas and metals companies are likely to spike the corporate sector earnings growth rate during the quarter under study. Excluding the oil companies, the profit growth is likely to increase by over 24 per cent and sales by around 17 per cent.
Cement and energy companies are forecast to witness a slowdown in net earnings while fertilisers, textiles and telecom companies would show a robust growth in net profit.
Automobiles, banks and fast moving consumer goods firms are likely to improve their earnings. Engineering and pharmaceuticals companies are seen doing an encore of their June quarter performance.
Telecom will be the fastest growing sector with a 46 per cent growth. Bharti will maintain its growth momentum driven by continued buoyancy in subscriber additions. IT is expected to clock a sales growth of 25 per cent driven primarily by high volumes.
The oil & gas sector will show a 29 per cent jump in topline primarily due to a quarter-on-quarter surge in crude prices. Even marketing companies will report 30 per cent revenue growth due to the higher prices of deregulated products.
The momentum in textile sales will stay with a 26 per cent growth, though some companies' results are not comparable due to the consolidation that happened this year.
Pharma sales are likely to grow at a rate of 17 per cent. All companies expect Dr Reddy's Laboratories are expected to post 15-20 per cent sales growth.
Auto sales growth is also seen picking up again after a lean first quarter and is pegged at 13 per cent this quarter. Sales of Bajaj Auto and Hero Honda are likely to grow 20 per cent.
Bharat Forge will maintain its growth momentum estimated at 30 per cent. Tata Motors, M&M and Maruti will report around 10 per cent revenue growth.
As far as banks are concerned the study sees a revenue growth of 16 per cent. Private sector banks would see their revenue growing 30 per cent.
Volumes and price hike affected in a few of the products are expected to boost FMCG companies growth by 12.1 per cent. Net profit would grow at 6 per cent - the lowest in the last four quarters.
Excluding metals and oil and gas (the two worst performing sectors), profit growth would be a robust over 20 per cent. The strongest growth will be in telecom, where PAT will surge 72 per cent. Textiles will see a 68 per cent growth in profits, the study said.
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