The Q4 Earnings Season has come to an end, with multiple sector impacted by weak consumer sentiment, margin pressures and global macroeconomic uncertaintiies. However, some did well. Mint Takes a look at the key trends which shaped this results season.
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How did Indian Companies Perform in Q4 FY25?
NIFTY 50 Earnings Per Share (EPS) Grew 4.9% On-Year in Q4, Against Expectations of a Decline. Excluding Financials, EPS GREW 10.5% On-Year. About 80% of Nifty Companies Eather Beat or Posted in-Line Earnings, as per Axis Securities. However, beyond the top 50 firms, growth headwinds was more prevalent. Q4 Profit after tax for BSE 500 (Excluding Oil Marketing Companies) Grew to 10%, even as revealed styed weak, noted Nuvama Institutional Equites. The improvement was due to cost rationalization and a low base. Revenue Growth at 9% was in Single Digits for the Eighth Consecurable Quarter.
What was the key trends this season?
Continued headwinds in consumption meant subdued Revenue Growth. Post-Covid, Profit Recovery Has Been Mainly LED by Margins Rather Than Revenue. The margin improvement was a result of factors like cost efficiencies, Benign Credit Costs and Cooling Input Price Pressures. However, with margins for most sector being close to decadal highs, the room for further improvement looks limited. Additionally, in the backdrop of weak demand, india inc. is cutting costs aggressively. BSE 500 Companies’ Wage Bill Growth Has Slowed Further to Just 5% Yoy in Q4 FY25-A Post-Covid Low, Nuvama said.
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How are Various Sector Placed at this Juncture?
Value retail, jewelery and premium real estate green, but broader consumption was stressed, especially in Urban Markets, Affecting Consumer Staples and Auto Sector. Banks and NBFCS Felt Pressure on Net Interest Income AMID Slowing Loan Growth. It firms reported an in-line set of numbers, but macro challenges in us and europe triggered downgrades for fy26/27.
How did mid- and small-cap firms do?
After outpacing large-caps in fy24, profits of small- and mid-caps (Smids) reconciled with larger peers in fy25, Posing a risk to elevated valuations. Smids’ pat growth fell to 9% in fy25 from 24% in the last year. For FY26, CONSENSUS Forecasts a Significant Bounce in Smids’ Profitability Compared With Large Caps. “We think they could disappoint as growth is Slowing Down in a Broad-Based Manner with even domestic indicators-Credit growth, Auto sales and real estate sales-sling,” Nuvama.
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What is the Earnings Outlook for India Inc?
Most Brokerage Cut their earrnings projections on Demand Slowdown, Moderating Credit Growth, Cost-Cutting By Corporates and Tariff Uncertainies. But they still expect nifty to deliver mid-teens growth in the next two years. JM Financial Projects Nifty 50 EPS to Grow 12% in FY26, Compared with the Earlier 16.4% Estimate and 14.3% in FY27. Sector which may do the heavy lifting are consumer, telecom, metals, mining, oil and gas and banks. Experts also Note Market Valuations are Expected, which may cap the UPSIDE.