Cement maker Grasim Industries, steelmakers JSW Steel and Tata Steel and jewellery maker Titan Company are among the companies that may report a 100-800 per cent surge in Q2 profit, Motilal Oswal Securities said in a note. Axis Bank, IndusInd Bank, Bajaj Finance, Hindalco and ONGC are a few other Nifty50 companies that may log over 50 per cent growth in September quarter profit.
In the case of Titan, Emkay Global expects it to log Rs 550 crore profit compared with Rs 199 crore reported for the year-ago period on a 64 per cent rise in sales at Rs 7,070 crore (80 per cent, excluding Rs 390 crore in bullion sales). This is after the Tata Group firm said it clocked 78 per cent YoY growth in jewellery business and 74 per cent growth in both eyewear and watches and wearables segments during the July-September period.
Motilal projects Titan’s profit nunber at Rs 529 crore.
“With lower contribution of studded jewellery, we expect pressure on margins. Accordingly, we expect Ebitda margins to decline 50 bps YoY to 8 per cent. However, Ebitda and PAT growth is likely to be very sharp led by strong sales growth on a soft base,” Motilal Oswal said.
The same brokerage pegged Tata Steel’s profit at Rs 10,397 crore, a 584 per cent YoY surge. Edelweiss sees Tata Steel’s profit growing 732.7 per cent at Rs 12,635 crore; Centrum Broking pegs the steel maker’s adjusted profit at Rs 14671 crore, up 821 per cent YoY.
For JSW Steel, Motilal projects the profit number at Rs 6,777 crore, up 354.40 crore YoY. Centrum pegs it at Rs 6,401 crore. Edelweiss sees consolidated profit rising 256.20 per cent to Rs 5,673.90 crore.
“The quarter saw a sharp sequential improvement in offtake, with higher exports offsetting subdued domestic demand, ” said Centrum Broking. Higher coking coal and iron ore prices more than offset higher steel prices, affecting Ebitda per tonnes, though Ebitda increased sequentially due to higher volume,” Centrum said.
Motilal suggests Grasim’s profit at Rs 966 crore, up 194 per cent YoY.
Cement prices softened in the September quarter sequentially, but remained higher on a YoY basis as companies took major price hikes in March and also in Q1FY22 to combat rising input costs.
“Cement companies attempted to push the prices in Q2FY22 further to mitigate rising input costs but owing to softer demand, higher prices could not sustain. Dealers indicated a better pricing environment to prevail in H2FY22,” Axis Securities said.
As per Motilal’s estimates, metal firms would contribute 60 per cent to the incremental profit growth in the September quarter, technology 19 per cent and private banks 13 per cent.
“JSW Steel, Tata Steel, ONGC, Reliance, and SBI are likely to contribute 80 per cent to incremental profit for the Nifty in 2QFY22,” it said.