Q1FY23 Earnings Preview - Topline to grow 36% y/y & for financials: PAT to grow at 48% y/y, spearheaded by NBFC

YES Securities universe (Ex Financial & OMC): Topline to grow 36% y/y

- Topline growth of 36% y/y (ex-financial & OMCs) is largely driven by E&P companies like Reliance and ONGC, while sectors like Automobiles and IT are also likely to see impetus, estimated to witness a low double-digit growth. Performance in 12 out of 15 sectors under our coverage (ex-financial & OMCs) is likely to see flattish growth in the quarter, indicating that only three sectors are doing most of the heavy lifting.

- After seeing three consecutive quarters of contraction operating margins are likely to remain flat (up 15bps y/y) on account of strong margin expansion in Oil & Gas space (excluding OMCs). Auto sector is also likely to witness an expansion after three consecutive quarters of contraction. On the negative side, Cement, Pharma & IT are likely to witness margin collapse by 9.4, 3.4, and 2.3 ppts y/y basis respectively

- PAT growth of 74% is predominantly driven by 147% PAT growth y/y for Oil & Gas (ex[1]OMC) space, (accounting for 45% of our earnings ex-Finance and OMC). While, Auto and Telecom, which reported losses in Q1 FY22 are also likely to witness significant positive traction

For Financials: PAT to grow at 48% y/y, spearheaded by NBFC

- NII for Banks is expected to register a healthy 16% y/y growth, boosted by a decent uptake in credit demand. Even though PPoP is likely to register a de-growth of 1.4% y/y, the lowest number on recent records as an unfavourable rise in G-Sec yield translates into a weak treasury income. Lower provisioning and higher NII will improve PAT by 29% y/y.

- NBFC & SFB are likely to witness one of the strongest growth post-COVID. Both the topline and bottom-line are expected to grow by 25% and 145% y/y respectively

Source : Equity Bulls

Keywords

YESSecurities Q1FY23 EarningsPreview