Q4 earnings so far: Maruti Suzuki, Yes Bank major disappointments; what to do ahead of poll results

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Updated: April 30, 2019 1:05:41 PM

After major bluechips reported their Q4 earnings for the latest Jan-Mar period, Kotak Securities notes that except for Yes Bank and the auto giant Maruti Suzuki most of the companies have beat estimates.

The BSE Sensex can be tracked for specific months before and after the elections to ascertain any such patterns. (Representational image)While Yes Bank reported its first ever quarterly loss, auto major Maruti Suzuki’s net profit declined for the third straight quarter.

After major bluechips reported their Q4 earnings for the latest Jan-Mar period, Kotak Securities notes that except for Yes Bank and the auto giant Maruti Suzuki most of the companies have beat analyst estimates. Notably, while private sector lender Yes Bank reported its first ever quarterly loss, auto major Maruti Suzuki’s net profit declined for the third straight quarter.

Yes Bank has reported its first ever quarterly loss of Rs 1,607 crore in the latest Jan-Mar 19 period on the back of a fall in non-interest income and a sharp increase in provisioning for bad loans, mainly due to defaults by the Infrastructure Leasing & Financial Services (IL&FS) group and Jet Airways. In the comparable period last fiscal, Yes Bank had reported a net profit of Rs 1,179 crore in the fourth quarter of FY18. 

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Auto-major Maruti Suzuki’s Q4 earnings were affected by adverse foreign exchange rates and commodity prices, as net profit declined for the third straight quarter. Maruti Suzuki’s net profit came in at Rs 1,795.60 crore. The firm’s net sales came in at Rs 20,737.50 crore, registering a tepid growth of 0.7% on-year. Apart from adverse foreign exchange rates and commodity prices, higher depreciation and higher sales promotion expenses also weighed on the profits, offsetting the auto-maker’s cost reduction efforts in the quarter.

According to Ashish Nanda of Kotak Securities, current volatility is high and so is the anxiety amongst market players as India votes. Therefore, traders should be ready to trade on both sides of the market as volatility is here to stay till election results are announced.  Taking stock of other global factors, Nanda noted that the Brent crude has dramatically fallen below the level of 72 over the weekend, implying is a positive for emerging markets and especially India.

“It’s a live example of “News follows to Price”, because inspite of several jolts since the beginning of the week, Nifty has stayed above 11,550 level. It reaffirms that the market discounts many things well in advance,” Ashish Nanda, EVP & Business Head – PCG, Commodities and Currency Business, Kotak securities said. According to the expert, investors should focus on banks, commodities and pharma stocks in the near future.

(Please consult your financial advisor before taking any investment related decision)

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