Q1 earnings preview: These 4 companies including Tata Steel, Hindalco may post over 40% jump in net profit

In its recent June quarter (Q1FY25) earnings preview note, domestic brokerage house Motilal Oswal Financial Services (MOFSL) predicted that the Nifty50 earnings are likely to grow by 4 percent percent on a year-on-year (YoY) basis. Excluding global commodities like Metals and Oil & Gas (O&G), the Nifty is anticipated to report a 10 percent YoY earnings growth, respectively, for the quarter, it added.

According to the brokerage, the overall earnings growth is likely to be driven by domestic cyclicals, particularly BFSI (Banking, Financial Services, and Insurance) and Auto sectors, with notable contributions from Metals and Healthcare.

Meanwhile, sales and EBITDA for Nifty are expected to improve by 6 percent and 4 percent YoY, respectively, forecasted the brokerage. Excluding Oil Marketing Companies (OMCs), the EBITDA of Nifty is likely to grow by 8 percent YoY, it noted.

While the majority of the companies are likely to post moderate earnings growth in the June quarter, the brokerage has listed 4 firms that are likely to post over 40 percent YoY growth in their net profit for Q1FY25. Let’s take a look.

Tata Steel: According to MOFSL, the steel major is likely to post a 79.4 percent YoY jump in its net profit at around ₹1,100 crore versus ₹600 crore in the same quarter last year. However, its net sale is expected to fall 2.5 percent YoY to ₹58,000 crore from ₹59,500 crore in the year-ago period. EBITDA, meanwhile, is expected to improve 15 percent to ₹6,000 crore as compared to ₹5,200 crore in Q1FY24, predicted the brokerage. According to MOFSL, the company’s India business is likely to see normalised volume in Q1FY25, whereas overseas operations are likely to remain flat. Netherlands will report positive EBITDA/t in Q1FY25, leading to improvement in performance while its UK business will see losses, which would lead to Europe EBITDA loss.

Apollo Hospitals: MOFSL expects the hospital firm to post a 79 percent YoY rise in its net profit at ₹298.2 crore in Q1FY25 as against ₹166.6 crore in the same quarter last year. Meanwhile, its gross sales are likely to increase 13.5 percent YoY to ₹5,013 crore in the quarter under review from ₹4,417.8 crore in the year-ago period. EBITDA, meanwhile, is expected to improve 33 percent to ₹676.8 crore as compared to ₹509 crore in Q1FY24, forecasted the brokerage. MOFSL noted that the company’s sales and EBITDA are expected to grow due to increased occupancy and Healthco operations. Watch out for GMV outlook in Apollo 24/7 and update on capacity expansion at Pune, Hyderabad, Kolkata, Delhi and Gurgaon, it added.

Divis Labs: According to the brokerage, the net profit of the pharma firm is likely to grow 43.7 percent YoY to ₹512.7 crore in Q1FY25 versus ₹359 crore in the same quarter last year. Meanwhile, MOFSL expects its net sales to increase 23.7 percent YoY to ₹2,199.4 crore in the quarter under review from ₹1,778 crore in the year-ago period due to good traction in CS, supported by growth in Nutraceutical and generics business, noted the MOFSL. EBITDA, meanwhile, is expected to increase 35.3 percent to ₹682 crore as against ₹505 crore in Q1FY24, predicted the brokerage.

Hindalco Industries: MOFSL estimates the net profit of the metal company to increase 42.4 percent YoY to ₹3,500 crore in Q1FY25 versus ₹2,500 crore in the same quarter last year. Meanwhile, its net sales are set to grow 10.1 percent YoY to ₹58,300 crore in the quarter under review from ₹53,000 crore in the year-ago period. EBITDA is also likely to improve 23 percent to ₹7,000 crore as against ₹5,700 crore in Q1FY24, forecasted the brokerage. As per the brokerage, the company’s volumes are expected to be strong while improved ASP (average selling price) will drive strong earnings growth in 1QFY25. The timeline for commissioning multiple capex is crucial and Novelis EBITDA/t guidance key to watch, it added.

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