Nifty companies have reported better than expected earnings in Q2 so far: Kotak Securities

Amid the ongoing earnings season, top market voices point out that Nifty companies have reported better than expected earnings in the quarter ended September-17. In an interview to CNBC TV18, Sanjeev Prasad, Co-Head and Managing Director, Kotak Institutional Equities said, “It’s been a good quarter, companies have reported better than expected earnings. There’s been weakness in OMCs like HPCL and IOCL. But if you keep those names aside, companies have reported decent numbers compared to expectations. In Nifty 50, the companies which have reported earnings, EBITDA margins are ahead of our estimates. Tata Motors, Bharti Airtel, Reliance did very well compared to expectations.” In fact the quarter so far has seen many stock upgrades too, points out Krishna Kumar Karwa of Emkay Global.

In an interview to CNBC TV18, Krishna Kumar Karwa, Managing Director at Emkay Global Securities said last week, “ Out of the companies under coverage at our end, almost hundred companies have announced their results. There have been target price upgrades on at least 50 companies, which is much more than what was happening in last quarter or few quarters ago. Even on the EPS upgrades, in 40-45 companies have seen them in FY-18 and FY-19. My sense is that the numbers have been better than expected.”

On similar lines, Taher Badshah CIO (Equities), Invesco Mutual Fund said in an interview to ET Now last week, “One should dissect the earnings to see how many companies are actually over-delivering, or beating street estimates versus earlier. An analysis of the 35 companies of Nifty which have delivered results so far, 75% of them have actually beaten street estimates, or at least met them. This number was closer to 55% in the last four or five quarters. This is a better way to track earnings delivery versus expectation, and I believe on that front, things seem to be getting better.”

While the quarterly numbers are either in line or better than expectations, the first half taken as a whole hasn’t seen growth. “If you look at the first half numbers in totality (in the first half), there hasn’t been growth in the EBITDA level so far. So hopefully we will see some growth in the next half as we go forward,” Sanjeev Prasad told the channel.

National Stock Exchange of India Ltd (NSE)