Out of the 50 Nifty companies, 33 have declared results and the status looks quite depressing. Aggregate profits of the Nifty companies are up just 2.5% (if you added them all up), and revenues are down.
The biggest performer, Vedanta (previously Sesa Sterlite) is up so much because of a 2,200 cr. book entry for depreciation adjustments in June last year. If you ignored that, Vedanta would show profits have fallen. And if you ignored Vedanta entirely, you get a 1.45% growth in overall profits.
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This is low but a few notes:
- Cement companies have fallen off a cliff, apparently. Look at the results of ACC, Ambuja Cements and Ultratech
- Banks are relatively okay, though Kotak had a hit due the ING Vysya Bank acquisition, and Punjab National Bank was just behaving like a Public Sector Bank
- IT companies have only shown single digit profit growth. HCL Tech was the exception and if you look above you’ll know why not to rejoice.
- Pharma companies have surprised on the downside and Auto companies on the upside; Hero Motocorp showed 33% profit growth today.
Overall, the figures aren’t impressive and we have a lot of results yet to come. After Airtel’s release tomorrow, there are BHEL, Grasim, M&M and Tata Motors on Friday, and the rest go into the next week. Airtel’s likely to be only saving grace; and this performance is not what we have overpaid this index for.
