The trading week from July 10th to 14th will see the onset of quarterly earnings season for the period between April – June 2023 for the fiscal FY24 at full swing. A host of companies have queued to present their Q1 results this week with Tata Consultancy Services (TCS), HCL Tech, and Wipro being the mood setter for the markets. BSE-listed 30 companies and Nifty-listed 50 companies are expected to report double-digit growth in net profit year-on-year (YoY) basis during Q1. In its research note, Kotak Institutional Equities analysts said, “We expect 1QFY24 net profits of the BSE-30 Index to increase 18% yoy (decline 8% qoq) and for the Nifty-50 Index to increase 25% yoy (decline 8% qoq). We estimate ‘EPS’ of the BSE-30 Index at Rs2,972 for FY2024 and Rs3,473 for FY2025 and of the Nifty-50 Index at Rs925 for FY2024 and Rs1,061 for FY2025.” Here is the list of companies set to announce their Q1 results on stock exchanges from July 10-14:July 10: Companies to announce their Q1 results on this day are — Atharv Enterprises, Dipna Pharmachem, Eimco Elecon, Indian Infotech & Software, Justride Enterprises, Kintech Renewables, Oscar Global, and Spectrum Foods. July 11: Eiko Lifesciences, Elecon Engineering, Excel Realty N Infra, Generic Engineering Construction and Projects, PCBL, Plastiblends India, Sita Enterprises, S&T Corporation, and Welcure Drugs & Pharmaceuticals. July 12: 5Paisa Capital, AKI India, Anand Rathi Wealth, Artson Engineering, Hathway Bhawani Cabletel & Datacom, HCL Technologies, National Standard (India), Pressure Sensitive Systems (India), Sanathnagar Enterprises, Steel Strips Wheels, and Tata Consultancy Services (TCS). July 13: Acrow India, Angel One, Avantel, BEPL, Birla Money, Compuage Infocom, Federal Bank, GI Engineering Solutions, Longview Tea Company, Nakoda Group of Industries, Roselabs Finance, Saptak Chem And Business, Sterling, and Wilson Renewable Energy, Tata Metaliks, Thirdwave Financial Intermediaries, Unitech, VB Desai Financial Services, and Wipro. July 14: Alfred Herbert, AMAL, Bandhan Bank, CCL Products, Coromandel Engineering Company, Den Networks, GTPL Hathway, Infomedia Press, JSW Energy, Justdial, Kesoram Industries, Sastasundar Ventures, Tata Steel Long Products, TTL Enterprises, Unichem Laboratories, Vandana Knitwear, Viji Finance, Virinchi Ltd, and VST Industries. Since three major IT firms will be presenting their Q1 results, hence for the IT sector, Kotak’s note said, “June is a seasonally strong quarter for IT companies. However, June 2023 will be an exception, with revenue declining for certain companies (Wipro and Tech Mahindra), flat for TCS, and marginally growing for some (HCLT at 1% and Infosys at 1% qoq). We believe revenue growth yoy will move to low-single digits to high-single digits. Weak discretionary spending across many verticals, and especially in financial services, telecom and hi-tech, should contribute to weak trends. US$ growth qoq will be aided by a cross-currency tailwind of 13-42 bps. A pickup in cost takeout and consolidation deals will result in robust deal wins for a few large IT companies.” Also, the brokerage added for the sector that EBIT margin will likely decline 20-90 bps sequentially unless companies cut variable compensation due to: (1) operating leverage hit resulting from revenue decline and (2) compensation revision for a few companies. EBIT margin should increase marginally yoy. Typical levers such as utilization rate and pyramid are difficult to utilize quickly in a low-growth environment. Accordingly, the brokerage said, “We do not expect significant change in FY2024E revenue growth outlook. Infosys may tighten its revenue growth guidance range to 4-6% from 4-7% earlier. HCLT will likely retain 6-8% revenue growth guidance. We expect both companies to retain margin guidance bands. Wipro’s quarterly revenue outlook for the September 2023 quarter will be muted at (-)1% to 1% range.” Peer Infosys will present its Q1 on June 20. Broadly, Kotak’s note said, “We expect 1QFY24 net income of the KIE universe to increase 46% yoy on an overall basis. Excluding oil marketing companies (OMCs), we expect net income to increase 13% yoy. We expect a bumper quarter for oil marketing companies as elevated marketing margins on petrol/diesel would likely lead to significant (~Rs250 bn) automobile fuel over-recoveries and offset moderation in refining margins. Other than OMCs, we expect a strong yoy increase in the net income of (1) automobiles (led by Tata Motors), (2) banks (strong loan growth, decline in credit costs), (3) commodity chemicals (margin expansion) and (4) telecommunication (ARPU increase) sectors. We see metals & mining sector to report a sharp decline (weak realizations) in net income on a qoq as well as yoy basis. Sequentially, we estimate net income of the KIE universe to decline 3%.” Related Premium Stories