Strong Q3 performance stokes more upgrades than downgrades, shows data

The number of companies (under coverage at Jefferies) whose earnings growth estimates got upgraded following their December quarter numbers beat those that faced downgrades by the widest margin in nine quarters. Analysts raised 2023-24 (FY24) earnings estimates for 49 per cent of 162 companies. Previously, a higher number of companies whose earnings got revised upwards was during the September 2021 quarter.

Companies in the infra, power, auto, most US generics, energy and cement saw upgrades. Insurers, select building materials, industrials, chemicals and most consumer discretionary saw downgrades. Companies under Jefferies coverage earnings posted earnings growth of 25 per cent, driven by strong performance of state-owned enterprises, energy, metals, autos and pharma sectors.

Energy and metals companies saw their profit grow by 65 per cent during the December quarter. The consensus Nifty FY24 earnings was cut by a marginal 1 per cent, while for the Nifty Midcap index it was upgraded by 0.8 per cent.