Surprise or disappointment: Check out how top companies have performed in Q1

Experts say that double-digit earnings growth could be seen after the September quarter. Sectors like auto and auto ancillaries, consumer discretionary and FMCG will get affected by demand slowdown.

We are in the midst of earnings season with some top names which already announced their June quarter numbers. IT majors Infosys and Tata Consultancy Services along with Tata Motors, Bank of Baroda, Hindustan Unilever, Larsen & Toubro and Zee Entertainment have already announced their Q1 numbers.

Bank of Baroda, Bajaj Finserv, Bajaj Finance, Asian Paints and Bharti Infratel posted profit growth while Tata Motors disappointed the Street amid fall in JLR sales.

“Given all the growth concerns, expectations have already been beaten down and we expect companies to largely deliver in line with consensus,” Vipin Khare, Director of Research – William O'Neil India, told Moneycontrol.

We expect the current quarter to be amongst the worst quarters of the past three years in terms of earnings. The early reports are indicating a slowing economy. We cannot comment on individual companies, says Sunil Sharma, Chief Investment Officer of Sanctum Wealth Management.

The June quarter is likely to mimic the March quarter with financials leading the growth while consumer discretionary, consumer staples,

Industrials, material, and real estate could well post declining trend sequentially in the top-line growth.

However, experts say that double-digit earnings growth could be seen after the September quarter.

Sectors like auto and auto ancillaries, consumer discretionary and FMCG will get affected by demand slowdown.

Here's a look at the top companies which have declared June quarter numbers:

Maruti Suzuki: Lower volumes drag profit lower by 23 percent

Maruti Suzuki India's June quarter standalone profit fell sharply by 27.3 percent Year-on-Year (YoY) to Rs 1,435.5 crore despite a three-fold jump in other income, dragged by lower volumes. Profit reported for the quarter ended in June 2018 was Rs 1,975.3 crore.

The revenue during the quarter degrew by 12.2 percent to Rs 19,719.8 crore compared to year-ago, with 18 percent YoY fall in sales volumes. The company sold 4.01 lakh units in June quarter. Other income increased to Rs 836.4 crore in Q1 against Rs 271.8 crore in the year-ago period.

Hindustan Unilever: Q1 profit at 14.8 percent on better volume growth

FMCG major Hindustan Unilever (HUL) reported a 14.8 percent jump in its standalone net profit at Rs 1,755 crore on the back of better volume growth. The company reported a profit of Rs 1,529 crore in the year-ago period.

The revenue of the company rose 6.6 percent at Rs 10,114 crore against Rs 9,487 crore. The company has reported domestic volume growth at 5 percent. Earnings before interest, tax, depreciation, and amortization (EBITDA) was up 18 percent at Rs 2,647 crore, while margin was at 26.2 percent.

Larsen & Toubro: Q1 profit rises 21 percent

Engineering and infrastructure major Larsen & Toubro reported a 21.2 percent growth in June quarter consolidated profit at Rs 1,473 crore YoY, with order inflow rising 11 percent. Profit in the corresponding quarter last fiscal was at Rs 1,129 crore. Profit from continuing operations increased 20.5 percent YoY to Rs 1,361 crore.

Larsen & Toubro in its BSE filing said its consolidated revenue was at Rs 29,636 crores from continuing operations, growing 10 percent YoY on good execution progress.

Anand Rathi maintained its buy rating on the stock with a target price of Rs 1,820 per share.

Zee Entertainment: Brokerages mixed await promoter stake sale

Zee Entertainment reported a 62.56 percent YoY growth in June quarter profit at Rs 530.57 crore and 47 percent growth in domestic subscription revenue in Q1. Total subscription revenue increased 36.7 percent YoY to Rs 708.8 crore with domestic subscription business growing 46.7 percent YoY in Q1.

CLSA said results exceeded its estimates led by the jump in domestic subscriptions. It retained buy call on the stock with a target price at Rs 515 per share. However, Morgan Stanley is bearish on the stock having an underweight call with a target price at Rs 370 per share as advertising revenue growth was weak.

Tata Motors: Big Q1 loss amid weak domestic, JLR volumes

Tata Motors reported a big loss of Rs 3,698 crore in June quarter on weakness in domestic as well as Jaguar Land Rover volumes. Jaguar Land Rover reported a pre-tax loss of 395 million pounds, compared to 264 million pound loss in the same period a year ago, on quarterly revenues that declined 2.8 percent YoY to 5.1 billion pounds resulting from the weaker market conditions, the company said.

Additional plant shutdown time and delays in WLTP (Worldwide Harmonised Light Vehicle Test Procedure) certification resulting from Brexit contingency planning also contributed to the lower sales and profits, it added.

CLSA has a sell call on the stock and slashed price target to Rs 120 from Rs 140 per share after cutting FY20-21 EPS estimates by 9-31 percent as the company reported worst pre-exceptional loss-before tax in a decade while Morgan Stanley has an equal-weight with the target at Rs 192.

Punjab National Bank: Profit of Rs 1,018.6 cr despite rising in NPA

Punjab National Bank (PNB) reported a profit for the quarter ended June 2019 (Q1FY20) despite a marginal rise in non-performing assets. The company has posted a net profit of Rs 1,018.6 crore against loss of Rs 940 crore in a year-ago period. Its net NPA was at 7.17 percent against 6.56 percent, QoQ while gross NPA at 16.49 percent against 15.50 percent, QoQ.

Asian Paints: Double-digit growth across earnings parameters

Asian Paints reported double-digit growth across earnings parameters and in decorative business. Consolidated profit grew 17.7 percent to Rs 655.44 crore in the quarter ended June 2019. Revenue increased 16.6 percent to Rs 5,130.63 crore compared to year-ago, beating analyst expectations.

The company had reported profit at Rs 556.85 crore and revenue at Rs 4,398.59 crore in the corresponding period of last fiscal. "The decorative business segment in India registered a high double-digit volume growth and delivered strong performance across regions," KBS Anand, Managing Director & CEO said.

Bank of Baroda: Profit of Rs 710 cr, asset quality weakens

Public sector lender Bank of Baroda was back in the black in the June quarter 2019 with a profit after the amalgamation of Rs 710 crore. However, asset quality weakened sequentially. On a comparable basis, the amalgamated bank (standalone) made a loss of Rs 49 crore in June quarter 2018, the bank said. The loss (mentioned in the statement) for March quarter was Rs 991.37 crore.

Net interest income during the quarter grew 2.6 percent to Rs 6,496 crore compared to a year ago. This resulted in a drop in NIM to 2.73 percent in Q1FY20 from 2.78 percent (adjusted for IT refund) in the previous quarter, the public sector lender said in its BSE filing.

Jubilant Foodworks: Q1 profit down at Rs 71.5 cr

Jubilant Foodworks, the operator of Domino's Pizza in India, has reported marginal fall in its consolidated net profit for the quarter ended June 2019. The company's Q1FY20 net profit was down 0.9 percent at Rs 71.5 crore against Rs 72.1 crore in the same quarter last fiscal.

Revenue of the company was up 10 percent at Rs 949.1 crore against Rs 863.2 crore. The company's same-store sales growth for the quarter stood at 4.1 percent.

Interglobe Aviation: Brokerages expect up to 46% upside

The operator of low-cost airline IndiGo reported the highest ever quarterly profit at Rs 1,203 crore in Q1FY20, 43 times Q1FY19 profit. Revenue from operations grew 44.7 percent YoY and its earnings before interest, tax, depreciation, amortization and aircraft and engine rentals (EBITDAR) in Q1 increased by 146 percent.

Credit Suisse has an outperform rating with a target of Rs 1,900, a return of 30 percent while Morgan Stanley has an overweight rating on the stock with a target of Rs 2,132 pointing a return of 46 percent.

Bharti Infratel: Q1 profit jumps 39%

Telecom infrastructure firm Bharti Infratel posted a 39 percent jump in consolidated net profit at Rs 887 crore for the June quarter on account of network expansion by mobile service providers. The company had recorded a net profit of Rs 638 crore in the same period a year ago.

The consolidated revenue, however, increased by only 1 percent to Rs 3,712 crore during the reported quarter from Rs 3,674 crore in the corresponding period of 2018-19.

While having an overweight call on the stock with a target price at Rs 323 (implying a 22 percent potential upside from current levels), global brokerage house Morgan Stanley said revenue in Q1FY20 was in-line with its estimates. ICICI Direct also said Infratel's reported revenues (without the impact of IndAS 116) at Rs 3,629.7 crore were better than its estimate of Rs 3,558.3 crore.

Kotak Mahindra Bank: CSLA advises buy, Jefferies sees underperformance

Kotak Mahindra Bank on July 22 said its standalone profit in the April-June period grew 32.7 percent YoY to Rs 1,360.2 crore. The growth was largely driven by lower provisions and higher net interest income.

The profit in the corresponding quarter last fiscal stood at Rs 1,024.94 crore. Net interest income during Q1FY20 increased 22.8 percent to Rs 4,159.1 crore with loan growth of 18 percent YoY.

Most brokerage firms retained their rating for the bank after June quarter results. CLSA maintained its buy rating but raised its target to Rs 1,750 from Rs 1,665 earlier. The global brokerage firm is of the view that lower funding cost is likely to aid growth but valuation remains rich. Jefferies retained its underperform rating post Q1 results but raised its target to Rs 1,225 from Rs 1,175 earlier.

TVS Motor Company: Profit declines 5.5%, brokerages remain bearish

Chennai-based TVS Motor Co reported a 5.5 percent decline in consolidated net profit at Rs 151.24 crore for the first quarter ended June 30. The company had posted a consolidated net profit of Rs 160.05 crore in the same quarter a year ago, TVS Motor Co said in a regulatory filing.

Consolidated total income during the quarter under review stood at Rs 5,026.27 crore as against Rs 4,626.15 crore in the year-ago period, it added. The company's total expenses during the period were higher at Rs 4,793.40 crore as compared to Rs 4,385.50 crore in the corresponding period a year ago.

Brokerages remain bearish on the stock with Credit Suisse staying neutral with the target at Rs 360 while Citi has a sell with the target at Rs 360. CLSA also has a sell on the stock with a target of Rs 360 per share.

Bajaj Finance: Q1 profit jumps 43% YoY, NII surges

Bajaj Finance's June quarter consolidated net profit rose 43 percent YoY to Rs 1,195 crore, the highest ever. The company had reported consolidated profit at Rs 835.9 crore in the last year. Net interest income during the quarter grew 43 percent, higher-than-street-estimates, to Rs 3,695 crore compared to year-ago. The consolidated asset under management surged 41 percent YoY to Rs 1.29 lakh crore, the non-banking finance company said in its BSE filing.

Total operating expenses to net interest income for Q1 was lower at 34.98 percent against 37.02 percent in the same period last year, the company said, adding new loans booked during the quarter increased 29 percent to 72.7 lakh compared to the previous year.

Bajaj Auto: Q1 numbers meet the expectation

Two-and-three-wheeler maker Bajaj Auto‘s June quarter (Q1) earnings met analyst expectations on July 26 with profit growing a percent compared to year-ago, driven by slightly better-than-expected revenue growth amid subdued industry environment. Profit during the quarter increased to Rs 1,125.7 crore, increased by 0.94 percent from Rs 1,115.23 crore in the previous year, which far better than its peer TVS Motor which posted 5.5 percent decline in profit and warning of poor industry growth in the second half of FY20.

Revenue from operations rose 3.9 percent YoY to Rs 7,755.82 crore despite tepid volume growth of 2 percent YoY, led by the healthy realization on price hike during the quarter.

Total two-wheeler sales volume for the quarter was at 11 lakh units, up 5 percent YoY, while three-wheeler sales volumes were at 1.6 lakh units, down 16 percent YoY. Total motorcycle volumes increased by 4 percent YoY while three-wheeler volumes declined 20 percent YoY.

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