Q1 Results 2024: With the likes of TCS, HCL Tech, Asian Paints, LTIMindtree and many others having already released their earnings for the quarter that ended June 30, 2024, the Q1 earnings season has started and is in full swing. Market participants were today keen on the performance of players like Infosys, Tata Technologies, JSW Infra, Havells India, Persistent Systems, CEAT, Polycab India, Dalmia Bharat, Central Bank of India, among others. Meanwhile, the street also keept a watch on how stocks performed for the companies that have already released their earnings for the period.
The week will witness announcements from the likes of JSW Steel, Reliance Industries, BPCL, Wipro, among others.
Q1 Results 2024 Highlights: Infosys, Tata Technologies, JSW Infra, L&T Tech, Havells India, and others released earnings
Ceat Q1 FY25
Total income at Rs 3198.97 crore Vs Rs 2938.42 crore on Q1FY24
Net Profit at Rs 154.18 crore Vs Rs 144,01 cr in Q1FY24
The company's revenue in constant currency terms fell 3.1% on quarter in Q1 of FY25. However, the revenue saw a growth of 6.1% on year in the same time period as aforementioned.
"We had healthy large deal wins in the quarter, with two USD 30 million deals, two USD 15 million deals and three deals of USD 10 million each. In AI, we are accelerating our investments and innovation focus leading to a total of 61 patents being filed so far. We are starting to win AI led deals on the back of our Gen AI solutions across Asset Health, software development and digital assistants.
Our operational performance was impacted by revenue seasonality and the investments we are making in each of the 3 segments to accelerate growth. We expect EBIT margins to see an improvement in the coming quarters as growth gets broad based across segments. With phase one of our reorganization and related investments in technology and leadership complete, we reaffirm our FY25 guidance of 8-10% revenue growth in constant currency, and remain committed towards achieving the USD 1.5 billion revenue run rate," said Amit Chadha, CEO & Managing Director of L&T Technology Services.
The company's revenue from operatiosn stood at Rs 2,461.9 crore in Q1 of FY25, compared to Rs 2,301.4 crore it posted in Q1 of FY24.
The company reported a net profit of Rs 313.9 crore in Q1 of FY25 Vs Rs 312.1 crore it posted in the same period a year ago.
Biswajit Maity, Sr Principal Analyst at Gartner highlighted that despite various microeconomic challenges and discretionary client spending, Infosys's overall outlook remains positive as its deal pipeline remains good and the , "highly successful large-deal pursuit strategy has enabled Infosys to secure an increasing number of large deals in recent years.
"These significant wins in FY24 are expected to contribute to strong revenue growth in FY25. Infosys leverages its established relationships to initiate numerous transformation projects within its existing customer base, focusing on cost savings and value creation. Infosys helps clients navigate current business environments and prepare for future contingencies across various domains, including analytics, big data, customer service, and software engineering."
He added that "Infosys has bolstered its AI capabilities by reskilling employees and leveraging both proprietary and open-source large language models (LLMs). In 2023, Infosys launched Project Maximus, which aims to improve margins across five pillars: automation through generative AI, hierarchy index, portfolio of projects, pricing, and cost initiatives which continue to improve their margins. These efforts, combined with technologies to enhance intelligent automation and virtual assistants, solidify Infosys as a strong partner in the IT ecosystem."
The total head count for the quarter has come down to 315,332 employees, fall of 6.2% on year, in comaprison to 336,294 employees in Q1 of FY24.
The company's operating margin epanded 0.3% on year at 21.1% in Q1 of FY25, while it expanded 1% sequentially.
“Our relentless drive on cost optimization through Project Maximus, a comprehensive margin expansion program, is reflected in the all-round improvement in key operating metrices leading to 1.0% growth in operating margin in Q1”, said Jayesh Sanghrajka, CFO. “We had the highest ever FCF generation at $1.1 bn and ROE increased to 33.6% due to higher payouts to investors”, he added.
Infosys raised the revenue growth guidance for FY25 to 3%-4% in constant currency from 1%-3%, earlier.
Financial Services contributed the highest revenue in the company. It grew to Rs 10,816 crore in Q1 of FY25, up 1.4% on year, compared to Rs 10,661 crore the segment contributed a year ago in the same time period.
The company reported a growth of 3.6% sequential in the constant currency terms in the first quarter of FY25, while the company grew 2.5% on year in Q1 FY25.
The tech gaint's revenue from operations grew 3.6% on year to Rs 39,315 crore for the quarter ended June 30, 2024, against Rs 37,933 crore it posted in Q1 of FY24.
Infosys' consolidated net profit grew to Rs 6,374 crore in Q1 of FY25 Vs Rs 5,945 crore it reported a year ago in the same time period.
The company's revenue rose to Rs 5,633.37 crore in Q1 of FY25, in comparison to Rs 4,771.36 crore it posted in the same timeframe a year ago.
Tata Communications' consolidated net profit declined to Rs 332.93 crore on year in Q1 of FY25 from Rs 381.75 crore in Q1 of FY24.
The Board of Directors, at the Meeting, reviewed and approved the proposal for raising of funds through issuance of Non-Convertible Debentures (‘NCDs’) on private placement basis, for an amount up to Rs 2,000 Crores. The Board also authorized an internal committee, to take all actions in respect of finalization of terms of issuance and allotment of NCDs.
The company's revenue from operations grew 21% on year to Rs 4,698.03 crore in Q1 of FY25, against Rs 3,889.38 crore reported in Q1 of the previous fiscal year.
Polycab India reported a consolidated net profit of Rs 401.62 crore in the first quarter of FY25, compared to Rs 403.16 crore it posted in the same period a year ago.
The company's revenue from operations came in at Rs 5,806.21 crore in Q1 of FY25 against Rs 4,833.80 crore it posted in the same period in the previous fiscal year, a jump of over 20% on year.
Havells India records a consolidated net profit of Rs 407.51 crore in Q1 FY25 Vs Rs 287.07 crore in Q1 of FY24.
Karur Vysya Bank posted a jump of 28% year-on-year in its net profit in the first quarter of the fiscal year 2024-25.
Karur Vysya Bank reported a net profit of Rs 458.65 crore for the quarter that ended June 30, 2024, Vs Rs 358.63 crore in Q1 of FY24.
Sterling & Wilson Renewable Energy's revenue from operations stood at Rs 915.06 crore for the quarter ended June 30, 2024, in comparison to Rs 514.96 crore reported in the corresponding period in the last fiscal year.
The company posted a net profit of Rs 4.83 crore in Q1 of FY25 against a net loss of Rs 95.32 crore it reported in the first quarter of FY24.
Central Bank of India's interest income stood at Rs 5,431.34 crore for the quarter against Rs 4,535.14 crore reported in the same period a year ago.
Central Bank of India reported a consolidated net profit of Rs 942.42 crore in Q1 of FY25 Vs Rs 494.98 crore posted in Q1 of FY24.
Asian Paints delivered results below estimates in Q1 amid weak demand conditions led by general elections & severe heatwaves, said Prabhudas Lilladher in its research report. The company's volume witnessed a 7% growth led by rural recovery but revenue declined by 2.3% due to the price cuts & shift in product mix. "Demand conditions are expected to improve with improving rural sentiment & gradual pick-up in monsoons. However, the expected increase in competitive intensity with Grasim’s entry into the paints business continues to remain a key monitorable. We have a "Reduce" rating on the stock," said Amnish Aggarwal, Head of Research at Prabhudas Lilladher.
Elara Securities initiates coverage on Polycab India with a "Buy" rating and a target price of Rs 8,290 per equity share on 45x March 2026E P/E, implying an upside of 24%, ahead of its Q1 FY25 results. "Our P/E is at a 10% premium compared to the three-year average one-year forward consumer electricals industry P/E of 41x. Our sensitivity analysis assumes: 1) a 5% revenue CAGR during FY25-27E can lead to a fall in EPS of 9% during FY25-27E & a cut in target price by 9%, and 2) a 5% fall in gross margin can lead to an EPS drop of 7% with a 7% target price cut," said Elara Securities in a research report. According to the brokerage house, key downside risks are a capex delay, overall economic slowdown, resulting in lower infra demand, and weakness in consumer demand.
JSW Steel may post flattish annual revenue growth when it reports Q1FY25 results on July 19, expects Parth Shah, Research Analyst at StoxBox. The weaker sales realization due to lower HRC prices and muted export performance is likely to weigh on the overall financial performance. The lower operating leverage is anticipated to weigh on margins in the first quarter, with a broadly stable EBITDA/tonne performance. "We believe that the company is well positioned for growth due to growing infrastructure demand, recovery in rural areas, and on-time improved monsoons. Complementing such factors, the declining coking coal costs, expected traction in operational efficiencies, and a stronger balance sheet would further strengthen the position," said Shah. Also, the board’s approval for the acquisition of a coking coal mine in Mozambique provides access to 800 million tonnes of inventory which will further smoothen the coking coal cost, thereby improving production economics.