Q4 Earnings Preview: From Tata Steel to Airtel, these 5 companies are likely to post over 15% decline in net profit

The earnings growth is likely to be primarily driven by domestic cyclicals such as Auto and BFSI, which are expected to see a 20 percent and 15 percent YoY growth, respectively. Conversely, earnings growth is likely to be dampened by global cyclicals like Oil & Gas and Metals, which are estimated to decline by 6 percent and 12 percent YoY, respectively, as per the forecast.

Among stocks, 5 Nifty50 constituents are expected to post an over 15 percent year-on-year (YoY) decline in their net profit of Q4FY24. Let’s take a look.

JSW Steel: The brokerage expects the steel major to report a 58 percent YoY decline in its net profit at ₹1,500 crore as against ₹3,700 crore in the same quarter last year. On a quarter-on-quarter (QoQ) basis as well, the profit is likely to fall almost 33 percent, predicted MOSL. It also sees JSW’s net sales declining 4.6 percent to ₹44,800 crore versus ₹47,000 crore in Q4FY23. JSW Steel is expected to post a QoQ increase in volumes in Q4FY24, said MOSL, adding that coal costs are expected to remain at elevated levels in 4QFY24. Management commentaries on capex are important. Also, the performance of domestic and overseas subsidiaries will be crucial, it noted. Management commentaries on FY25 production and sales also are important monitorables.

Tata Steel: The steel major is likely to post a 37.7 percent YoY decline in its net profit at ₹1,100 crore as against ₹1,700 crore in the same quarter last year. However, on a QoQ basis, the profit will jump over 24 percent, predicted MOSL. It also estimates Tata Steel’s net sales declining 2.8 percent YoY but rising 10.7 percent QoQ to ₹61,200 crore. According to MOSL, management commentary on European operations is critical while management guidance on average steel prices and cost of production across geographies is to be monitored. Also, one must keep an eye on the company’s Capex timeline and await an update on the blast furnace status in the Netherlands, it added.

BPCL: The oil and gas major is expected to report a 15.9 percent YoY decline in its net profit at ₹6,360 crore in Q4FY24 as against ₹7,560 crore in the same quarter last year. Its net sales, meanwhile, are projected to be flat YoY at ₹1.18 lakh crore. MOSL expects refinery throughput at 10mmt (-6 percent YoY/+1 percent QoQ) and sees reported GRM at $17.1/bbl, with a blended gross marketing margin at ₹3.4/liter. It also estimates marketing sales (excluding exports) volumes of 13.3mmt (+3 percent YoY and QoQ) during the quarter. Watch out for updates on the expansion of the Bina refinery and the construction of a new petrochemicals plant, added MOSL.

Tech Mahindra: The IT major is likely to report a 30.6 percent YoY decline in its net profit at ₹900 crore in Q4FY24 as against ₹1,300 crore in the same quarter last year. However, on a QoQ basis, the profit is expected to jump 28.5 percent. Meanwhile, its total revenue is predicted to decline 3.5 percent YoY to ₹13,200 crore versus ₹13,700 crore last year. MOSL expects its revenue growth to be muted at 0.7 percent QoQ CC due to weakness in both CME and Enterprise verticals. Also, deal wins are likely to be muted due to macro uncertainty. It also forecasts deal TCV to the tune of $500m in Q4FY24. Moreover, margins are likely to improve 140bp QoQ, as the impact of cost-control efforts should start becoming visible. Weak growth is likely to keep margins under pressure, it cautioned. The outlook on margin and growth in the CME vertical will be the key monitorable, added MOSL.

Bharti Airtel: MOSL forecasts the telecom major to post a 15.2 percent YoY decline in its net profit at ₹2,200 crore in Q4FY24 as against ₹2,600 crore in the same quarter last year. Meanwhile, its total revenue is likely to rise 8 percent YoY to ₹38,900 crore versus ₹36,000 crore last year. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 10 Apr 2024, 04:52 PM IST