The Q2 earnings season has delivered a mix of strong performances and disappointments across sectors, with companies such as ITC, United Breweries (UBL), and Dixon Technologies delivering better-than-expected results, while NTPC, IndusInd Bank, and Petronet LNG posted weaker numbers.
Strong performances in Q2
- ITC reported a healthy Q2, with revenue coming in 9% higher than estimates, while cigarette volume growth stood at 3%, signaling resilience in its core business.
- United Breweries (UBL) exceeded estimates with its headline numbers, reporting a 27% rise in premium volumes, showcasing robust growth in the premium beer segment.
- Godrej Consumer Products saw revenue and EBITDA beat expectations, with volume growth in-line with estimates, reflecting steady demand in its key categories.
- Dixon Technologies reported a strong quarter with revenue up 1.3x compared to the previous period, while margins remained in line at 3.7%, driven by strong demand in its electronic manufacturing services.
- Indian Energy Exchange (IEX) delivered in-line earnings, with margins rising by 130 basis points and revenue up 29% year-on-year.
- Godrej Properties surpassed its full-year business development guidance of Rs 20,000 crore, reflecting the strength of the real estate market.
- Cyient posted in-line earnings with dollar revenue growing 10% quarter-on-quarter, signaling positive momentum in its international operations.
- Bikaji Foods saw an expansion in EBITDA margins despite gross margin contraction, with volumes rising 15%, showcasing strong consumer demand.
- Radico Khaitan posted a margin increase of 150 basis points, with revenue up 21% year-on-year, driven by its growing premium liquor portfolio.
- Home First Finance and Capital Small Finance Bank both posted healthy quarters, with net interest income (NII) up 19% and 20% year-on-year, respectively, reflecting strong growth in their lending businesses. Asset quality remained stable for both companies.
- PNB Housing Finance also reported a significant improvement in its net interest margin (NIM), rising by over 100 basis points quarter-on-quarter, while net interest income (NII) came in line with estimates.
Disappointments in Q2
- NTPC struggled with higher finance costs and expenses, with gross generation down 2% year-on-year, dragging overall results below expectations.
- IndusInd Bank reported a significant drop in operating profit for the first time in 33 quarters, with a 540 basis points sequential decline in return on equity (RoE).
- Petronet LNG saw a weak quarter as volumes slipped, and headline numbers fell sequentially, signaling softness in the LNG market.
- Mahanagar Gas (MGL) reported an 8% decline in revenue, with margins below estimates at 23.3%, while volumes stood at 4.10 mmscmd.
- GMR Airports saw its losses expand to Rs 280 crore, with margins slipping by 200 basis points year-on-year.
- JSW Energy posted a 1% decline in revenue, while margins fell by 530 basis points year-on-year, impacted by higher costs.
- Finolex Industries faced weaker realizations, leading to a 90% year-on-year decline in EBITDA, signaling challenges in its core business.
- Suryoday Small Finance Bank reported a weak quarter, with operating profit down 12% quarter-on-quarter.
- RR Kabel also faced challenges, with margins falling nearly 300 basis points, although volumes were up 3.8% year-on-year.
The Q2 results reflect a mixed performance across sectors, with consumer goods, manufacturing, and real estate companies outperforming, while energy, financial services, and infrastructure companies faced significant headwinds.
