Red signal: These 10 companies may report loss in June quarter earnings

Red signal: These 10 companies may report loss in June quarter earnings

Sectors like auto and auto ancillaries, consumer discretionary and FMCG will get affected by demand slowdown

The june quarter earning is likely to mimic the March quarter's with financials leading the growth while consumer discretionary, consumer staples, industrials, material and real estate could post declining trend sequentially in the top-line growth.

FMCG SECTOR

Given all the growth concerns, expectations have already been beaten down and we expect companies to largely deliver in line with consensus Vipin Khare Director of Research, William O'Neil India told Moneycontrol.

However, experts say that there is a possibility double-digit earnings growth could be seen after the September quarter.

While earnings may be subdued in Q1FY2019-20,we believe that earnings cycle should bottom by Q2FY2019-20 and improve from thereon.

For the quarter, consensus expects Nifty index constituent revenues to grow 7.4 percent; EBITDA to grow 10. percent and EPS to grow 29 percent.

Sectors like auto and auto ancillaries, consumer discretionary and FMCG will get affected by demand slowdown.

The subdued economic activity is likely to have affected revenue growth. Additionally revenue may be affected by the ongoing inventory correction. Both of these factors will also impact margins and thus net profit growth Karvy Stock Broking said in a report.

Tata Communications: Net Loss likely to be Rs 58 crore

Kotak Institutional Equities expects Tata Communications to report a strong quarter. The EBITDA is likely to post a growth of 19 percent on a YoY basis. The net loss is likely to contract to Rs 58.5 crore in Q1 compared to Rs 199.5 crore reported in the March quarter.

The domestic brokerage firm expects robust momentum in traditional services along with a better margin profile for growth and innovation services.

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Narayana Hrudayalaya: Net loss likely to be Rs 4.1 crore

Kotak Institutional Equities expects the revenues to increase 18 percent YoY, driven by (1) 12 percent YoY growth in mature hospitals, (2) higher contribution from new hospitals at Mumbai, Gurugram and Dharmshila and (3) Cayman revenues growing 55 percent YoY on a low base.

The domestic brokerage firm expects the EBITDA margin to improve 400 bps YoY to 11.3 percent, led by (1) strong performance at Cayman versus nil EBITDA in 1QFY19, and (2) new hospitals gradually ramping up.

On a sequential basis, Kotak expects modest 40 bps decline in EBITDA margins as Q1 is relatively weaker seasonally versus Q4. On an overall basis, the company is likely to report a net loss of Rs 4.1 crore in the June quarter compared to a profit of Rs 37 crore in March quarter.

State Bank of India: Net loss likely to be Rs 4,875 crore

Kotak Institutional Equities expects the loan growth at 12 percent YoY and the net interest margins (NIMs) to remain unchanged QoQ at 2.9 percent.

The Non-interest income growth will be higher due to higher treasury income and income from written-off loans.

The domestic brokerage firm expects the slippages at 1.6 percent of loans as recognition of large accounts is complete while gross NPLs could decline led by higher write-offs. Provisions would be high due to the ageing of NPLs. RoE recovery would be a key monitorable.

ICICI Bank: Net loss likely to be Rs 119 crore

Kotak Institutional Equities expects the core earnings (base quarter had stake sale gains of ICICI Life) trajectory to remain strong at 15 percent YoY, led by healthy loan growth (15 percent YoY) and better NII growth (19 percent YoY).

However, net interest margins (NIM) will decline QoQ by 10 bps due to lower one-offs. Credit costs will decline QoQ led by lower slippages. Below-investment-grade portfolio would decline QoQ and coverage ratio would improve sequentially but the bank may report a loss of Rs 119 crore in June quarter