28 BSE-listed companies report turnaround performance in March 2019 quarter

At a broader level, of the 19 Nifty firms that have announced their earnings, 15 have either met or exceeded estimates of analysts at Motilal Oswal on both the profit after tax (PAT) and EBITDA front

The overall slowdown in consumption as evidenced by the recent auto sales numbers of the past few months has cast a shadow on the market trajectory. 

The recent uptick in Indian equities was on the back of hopes of a stable government, a pick-up in economic activity amid benign oil prices that would help prop up corporate earnings growth in financial 2019 – 20 (FY20). However, some analysts have started to trim consensus earnings growth estimates, which until recently, were pegged close to 20 per cent for FY20.

Consumption growth trend is sluggish. Job creation is weak. Fiscal constraints and external uncertainties pose downside risks to near-term economic growth and corporate earnings, analysts say.

“The pre-election FY20 interim budget prioritised populism over fiscal prudence with a pause on fiscal consolidation. The new glide path does not change the original target of achieving 3 per cent of GDP by FY21, but the credibility of the target is questionable. Earnings risks and political uncertainties given ongoing elections could keep near-term market volatility high. Any significant increase in crude oil prices is a key risk,” says a recent report by HSBC Global Asset Management.

Amid this, 28 companies that are listed on the BSE reported a turnaround performance in the March quarter of financial year 2018 – 19 (Q4FY19) at the net profit level on a standalone basis as compared to the previous corresponding period, shows data from ACE Equity. These include Great Eastern Shipping, Indiabulls Real Estate, Tata Power, Majestic Auto, Mastek and Kopran.

Axis Bank, Bank of Maharashtra, PTC India Financial Services, Dhanlaxmi Bank, Aditya Birla Capital and The Investment Trust of India are the six companies from the banking and financial services segment that comprise these 28 turnaround entities.

"Private Banks continued reporting steady trends in loan growth, while the margin trajectory remains mixed. Asset quality has been largely stable for retail banks, but Yes Bank has reported higher NPL formation and disclosed a watch-list of standard stressed assets. Axis Bank and ICICI Bank have continued improving their provisioning coverage and guided for normalisation in credit cost from FY20, which will drive their return on equity (RoE) expansion," says Gautam Duggad, head of institutional reserach at Motilal Oswal Financial Servcies (MOFSL).

At a broader level, of the 19 Nifty50 companies that have announced their earnings, 15 have either met or exceeded estimates of analysts at Motilal Oswal on both the profit after tax (PAT) and earnings before interest, taxes, depreciation and amortisation (EBITDA) front. 

"The earnings upgrade/downgrade ratio is less than 1, with 14 MOFSL Universe companies witnessing upgrades of over 3 per cent and 26 witnessing downgrades of more than 3 per cent, indicating the continued weak underlying earnings momentum. For the MOFSL Universe, sales, EBITDA and PAT grew 11.9 per cent, 5.7 per cent and 9.5 per cent year-on-year, as against our estimates of 16.6 per cent, 4.1 per cent and 9.8 per cent YoY, respectively," Duggad says.

Company Name	March 2019 quarter PAT	March 2018 quarter PAT	Price (Rs)	M-Cap (Rs cr)
Axis Bank	1505.06	-2188.74	735.5	189224.9
The Great Eastern Shipping Company	135.61	-13.44	267.75	4037.1
Indiabulls Real Estate	126.927	-7.156	97.95	4414.4
Bank Of Maharashtra	72.38	-113.51	15.05	8765.3
Tata Power Company	53.86	-3939.12	64.5	17445.8
PTC India Financial Services	36.757	-264.679	16.05	1030.9
Dhanlaxmi Bank	27.61	-17.16	19.75	499.7
Orient Green Power Company	20.111	-18.524	3.86	289.8
Majestic Auto	18.311	-0.972	178.8	185.9
TV18 Broadcast	17.98	-4.52	29.65	5083.1
Tanla Solutions	7.232	-4.402	38.7	447.5
Aditya Birla Capital	6.52	-9.88	98.45	21672.9
DIC India	5.71	-1.829	338	310.2
The Investment Trust of India	5.195	-2.337	143.95	734.5
Kopran	3.907	-1.563	39.85	172.4
Avantel	3.153	-1.291	244.9	99.3
Times Guaranty	2.916	-0.103	36.2	32.6
Mastek	1.93	-1.6	461.1	1105.8
Smruthi Organics	1.888	-4.662	158.9	60.6
Artson Engineering	1.788	-0.109	38.6	142.5
Umiya Tubes	0.843	-1.532	10.96	11.0
Balaxi Ventures	0.687	-0.216	121.35	36.9
LGB Forge	0.642	-0.479	3.05	72.7
Landmarc Leisure Corporation	0.38	-0.247	0.39	31.2
Escorts Finance	0.333	-2.619	3.15	12.7
Rain Industries	0.187	-0.526	113.25	3809.1
Artemis Global Life Sciences	0.145	-0.175	59.75	395.5
Price, MCap on BSE as on May 8, 2019; Data source: ACE Equity