Net profit of the Sensex companies grew by around 1 per cent year-on-year (YoY) for the previous quarter ended June 2015. EBITDA margins surprised positively and expanded 120 basis points on a YoY basis, beating market estimates.
Among Sensex companies, banks (HDFC, Axis Bank) and Cipla led the growth. On the other hand, metals, utilities, Sun Pharma and select auto companies dragged growth.
For the quarter ended June 2015, Sun Pharma reported a consolidated net profit of Rs 680.03 crore, down 47.35 per cent, against Rs 1,291.64 crore in the corresponding quarter a year ago. Net profit of Tata Motors fell 48.49 per cent YoY to Rs 2,788.47 crore from Rs 5,413.4 crore during the same quarters.
On the other hand, consolidated net profit of Cipla jumped 104.46 per cent YoY to Rs 657.49 crore during the quarter under review. The company earned Rs 321.57 crore in the same quarter a year ago.
According to Bank of America Merrill Lynch (BoAML), profit growth continued to be anemic; registering growth of merely 9 per cent during April-June 2015 quarter on consolidated basis were slightly ahead of our expectation of 0.3 per cent for the Sensex companies. Nearly 45 per cent of companies missed analyst estimates as against 30 per cent companies surprising estimates. The global investment bank estimated EBITDA margin growth of 75 basis points for the quarter ended June 2015.
During the earnings season, BoAML witnessed a sharp downgrades in 2015-16 Sensex earnings growth from 23 per cent to 18 per cent.
Goldman Sachs in a research note said, “Corporate results for Q1, FY16 remained generally weak, though there were some tentative positive signs. On the consumer side, volume growth for companies was largely flat, in the mid-single-digits. There was some positive news from bank results, with new stress loan formation coming down in the quarter both for private and public banks.”