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About 40% Nifty firms miss St estimates

Around six Sensex firms have missed the expectations in terms of both profit and sales, while it is eight companies for Nifty 50

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Around 40% of the BSE Sensex and Nifty 50 companies that have announced their third quarter results have missed analysts' estimates in terms of either profits or sales.

Among the 30 companies S&P BSE Sensex, around six have missed the street expectations in terms of both profit and sales, while the figure was eight companies for Nifty 50. A total of 19 companies on Sensex and Nifty have missed the street's estimates either in terms of profit or sales. Around 11 of them were Sensex companies which missed estimates either in terms of profit or sales. ONGC is yet to announce its December quarter results.

Among the sectors, auto was the major disappointment, followed by information technology, non-banking financial services and power sectors.

The companies which failed to meet Bloomberg compiled mean analyst expectations, both in terms of profit and sales, include HDFC Bank, Hindustan Unilever, Maruti Suzuki India, Power Grid Corporation of India, Tata Consultancy Services, Tata Motors, Cipla, JSW Steel.

Though HDFC Bank, Hindustan Unilever, Power Grid Corporation and TCS reported year-on-year higher quarterly profit and revenue for the quarter ended December 2018, they failed to meet analysts' expectation.

Among the stocks which gave a strong performance, beating analysts' expectations were Adani Ports & Special Economic Zone, Zee Entertainment Enterprises Ltd, Axis Bank, Coal India, ITC, Kotak Mahindra Bank, Larsen & Toubro, Reliance Industries, State Bank of India, Sun Pharmaceutical Industries, Tata Steel, Bajaj Finance, Gail India, Grasim Industries, HCL Technologies and Titan Co.

The companies which have partially missed analyst estimates include Asian Paints, Bajaj Auto, Bharti Airtel, HDFC, ICICI Bank, IndusInd Bank, Infosys, Mahindra & Mahindra, NTPC, Wipro, Yes Bank Ltd, Bajaj Finserv, Bharti Infratel Ltd, Dr. Reddy's Laboratories Ltd, Hindalco Industries, Indiabulls Housing Finance, Tech Mahindra, UltraTech Cement, and UPL. These companies have not met the street expectations either in terms of profit or revenue.

Among them, Bharti Airtel, Housinf Development Finance Corporation, ICICI Bank, Infosys, Mahindra & Mahindra, Yes Bank, Indiabulls Housing Finance, and UPL witnessed drop in their profit on a year-on-year basis.

Oil marketing companies including BPCL, HPCL, Indian Oil Corporation beat the street estimates despite witnessing a slump in their year-on-year net profit for the quarter ended December 2018. Hero MotoCorp and Vedanta also beat street expectation despite reporting a drop in profitability.

On the other hand, Bajaj Auto, IndusInd Bank, Wipro, Bajaj Finserv, Bharti Infratel, Dr Reddy's Laboratories, Hindalco Industries, Tech Mahindra, and UltraTech Cement missed analysts' expectations despite reporting strong to decent third quarter numbers.

Sensex companies' December quarter profit has increased 22.8% over the same period last year, whereas sales rose 23.14% on a year-on-year basis. Nifty companies profit, on the other hand, is lower by 2.16%, though sales increased 18.65%.

A K Prabhakar, head-research, IDBI Capital said the third quarter results for the companies under his coverage area have been largely been in line with the expectations, except for auto sector which have been a disappointment. He said banking stocks performed better though HDFC Bank has been a minor disappointment.

According to another analyst, Tata Motors and Maruti Suzuki have disappointment, followed by NBFC stocks, adding that the performance of the NBFC sector was mostly in line with the expectation post the IL&FS fiasco.

The analyst also said that the oil and gas sector have performed better than expected in the December quarter, however, going ahead there is a risk of fuel subsidy burden, announced by the Union government in the Interim Budget, on the upstream public sector companies in case there is a sharp rise in crude price.

WAY OFF MARK

  • Around six Sensex firms have missed the expectations in terms of both profit and sales, while it is eight companies for Nifty 50
     
  • A total of 19 companies on Sensex and Nifty have missed the street's estimates either in terms of profit or sales
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