From next week, India Inc. will start declaring its financial results for the March 2022 quarter. For nearly half the quarter, the Russo-Ukraine war was raging, disrupting global supply chains and increasing input costs for companies.
Yes Securities in a report expects total revenue growth of 19 per cent (excluding financial and oil marketing companies) for India Inc, driven primarily by oil and gas, chemicals and information technology. “Adjusted PAT (Profit After Tax) is expected to grow by 32 per cent annually, largely driven by the strong performance of banks.”
automobile sector
It said the sector is expected to see a massive contraction of 50 per cent, hampered by both supply-side issues and rising input costs.
financial sector
“For financials, NII growth is likely to be the strongest in the last eight quarters, as credit offtake picks up during the festive season.” It added that the operating performance of the financials is likely to remain flat on a year-on-year basis. Turning into a modest 4 per cent increase, despite a favorable base, the PAT for the financials would be a staggering 40 per cent increase.
banking sector
“Sequential credit growth in the fourth quarter of 2021-22 will be reasonably healthy, as retail disbursements will pick up after the relatively ineffective third wave of COVID-19,” the report said.
The fresh slippages in the March 2022 quarter will generally be steady for banks to ease out on a sequential basis. It said some of the initial underlying tension could build up due to the disruption caused by the third wave of COVID-19 and the Russo-Ukraine war.
capital goods sector
YES Securities expects 4Q to be healthy for the sector, reporting a revenue growth of 12 per cent as capacity utilization levels increase, owing to pick-up in economic activity, capital expenditure (capex) from the government as well as the private sector. ) Outlay is on and supply side bottlenecks are being removed.
“We expect project companies to report revenue growth of 12 per cent on account of a sharp pick-up in execution of their order books and labor availability reaching pre-COVID-19 levels,” it added.
consumer durables sector
For the consumer durables sector, gross margins are expected to remain under pressure, as commodity prices remain elevated and companies are unable to fully pass on the increased input prices. “We expect strong Q1FY23 for cooling products companies, given the forecast of sales for the harsh summer and uninterrupted summer season after two years.”
IT industry
The performance of the IT industry in the March 2022 quarter will be marginally affected due to lesser number of days in the quarter. Attrition is almost at peak for most of the IT companies and it should stabilize and come down going forward. Earnings before interest and tax (EBIT) margin performance is expected to be flat quarter-on-quarter (+/- 20 bps) for most companies.
infrastructure sector
Despite Q4 being the strongest performance quarter, the infrastructure sector is expected to report year-on-year (average) revenue growth of 3 per cent as against 18 per cent in 4QFY21, despite higher base and delays in achieving the target. Due dates for their HAM (Hybrid Annuity Model) portfolio.
“On the margin front, due to sharp rise in commodity prices and change in revenue mix, we expect Ebitda margins to remain under pressure. Adjusted PAT is expected to remain sluggish due to rising financial costs and weak topline performance.
pharma sector
For the pharma and healthcare sector, the March 2022 quarter will be a quarter where the input cost and gross margin trajectory will be focused as an initial plateau in costs like freight, solvents, other key ingredients coming from China, which is expected to hit January. / were seen in the beginning. reversed during the February quarter.
energy and chemical industry
“We expect earnings improvement in QoQ and YoY for upstream (ONGC, OINL) on higher crude oil prices,” the report said. On the other hand, refiners expect to benefit from a strong recovery in refining cracks. , especially in March 2022 when the MS and HSD cracks hit a decade high. Besides, the potential for inventory gains will also help the refiner’s earnings.”
Among gas utilities, city gas distribution companies may report quarterly improvement in earnings due to revision in CNG and PNG prices and cap on gas sales, which will limit dependence on costlier LNG.
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