India Inc net profits likely to fall sharply in Q2FY23

India Inc hints net profits likely to fall in Q2FY23
India Inc hints net profits likely to fall in Q2FY23

Indian Market
by 5paisa Research Team Last Updated: Dec 12, 2022 - 04:31 pm 12.6k Views

As the September 2022 quarter (Q2FY23) earnings season begins, early estimate by brokers are that the season could be fairly dull and boring with tepid sales growth and negative earnings growth. Sectorally, the banks and auto firms are likely report good earnings growth, but overall the profits are likely to be dragged down by the EBITDA losses of oil marketing companies viz. IOCL, BPCL and HPCL. In addition, the profits of cement manufacturers is likely to be under strain due to high input costs while producers of metals and minerals are likely to be hit by weak realisations on the back of tepid LME prices.

If oil and cement stocks are included, the profit fall could be as high as 26% according to a report by Kotak Institutional. Even if these stocks are excluded, the negative contraction would still be around 9%. The one redeeming sector will be the auto sector thanks to the better supply of chips and higher ASP (average selling prices). Auto companies are likely to witness high single-digit revenue growth on sequential basis. That is already evident in the strong volumes posted by four wheelers and two-wheelers.

The all-important IT pack will see revenues grow by 2.5-5% sequentially in constant currency terms, while it would be about 100 bps better for the larger players. Consumer discretionary and stables producers are likely to see good top line growth but gross margin pressures during due to higher raw material costs. What about the banks? Banks are likely to see robust y-o-y earnings growth helped by lower provisioning for loans, as well as due to advances growing by more than 15%. The issue of yields impacting bond values is also limited. Overall, it will be a case of profits spoiling the revenue story in Q2FY23.

How do you rate this article?

Fill in your details below:

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.


Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

Open Free Demat Account

Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number