4QFY22 Results Review: BFSI And Commodities Drive Earnings

Corporate earnings continued to remain healthy in 4QFY22 and instilled a ray of hope, amid the grim situation plagued by the disruptions, Motilal Oswal Financial Services (MOFSL) has said in its India Strategy Report.

The MOFSL Universe earnings growth of 21% YoY in 4QFY22, which was the lowest since 3QFY21, came on a high base of 99% growth in 4QFY21. While the aggregate growth appeared impressive, it was hardly broad-based and driven only by three sectors: BFSI, O&G, and Metals.

"More than half of the incremental growth was steered by BFSI, driven by a modest revival in credit growth and improvement in asset quality trends. BFSI, Commodities (Metals & O&G) and IT accounted for 90% of incremental earnings YoY for our coverage universe," the report says.

For 4QFY22, Nifty sales/EBITDA/PAT growth was in line at 23%/16%/21% YoY (v/s our estimates of 28%/19%/23% YoY), respectively, while PBT growth came below our estimate at 22% YoY (v/s our estimate of 28% YoY).

"Among the Nifty constituents, 42% of the companies beat our PAT estimates, while 26% missed," Motilal Oswal Financial Services said in its report.

Nifty EPS for FY23E was reduced by 0.7% to Rs 864 (earlier: INR870) largely due to notable downgrades in ONGC, Hindalco, JSW Steel, and TTMT's earnings.