look news india
New Delhi: Indian companies' revenue and profit growth may remain sluggish in the first quarter of the current financial year. Brokerage firms are cutting growth estimates from the highest levels of the previous financial year. Various brokerage firms in their estimates have indicated a slowdown in revenue growth and a modest increase in overall profit growth for companies during the April-June quarter of the current financial year.
According to the brokerage firm's estimates, the total net profit of Nifty 50 companies in the first quarter of FY 2025 may grow by only 1.6 percent compared to the same quarter of the previous fiscal year, which is the lowest growth in the last seven quarters. The total net profit of Nifty 50 companies grew by 15.2 percent in the fourth quarter of FY 2024 and 38.9 percent in the first quarter of the same financial year.
Similarly, the total revenue of these companies is expected to grow by 4.4 per cent in the first quarter of FY 2025, which would be the slowest growth in 14 quarters. The total net sales or revenue of these companies grew by 8.4 per cent in the fourth quarter of FY 2024 and 7.1 per cent in the first quarter of the same financial year.
Excluding banks, financial services and insurance (BFSI) companies, the overall net profit of Nifty 50 companies is expected to grow by 1.5 per cent in the first quarter of the current financial year, which will be the slowest growth since the December 2022 quarter. Similarly, the overall net income of these companies in the first quarter of the current financial year is expected to grow by 4.4 per cent compared to the same quarter of the previous fiscal, which will be the slowest growth rate in three quarters.
In comparison, after excluding BFSI and oil and gas companies, the total net profit of Nifty 50 companies is estimated to grow by 10.6 percent in the first quarter of FY 2025, 21.8 percent in the fourth quarter of FY 2024 and 19.3 percent in the first quarter. This is less than the growth in the quarter of FY 2025. Due to high margins, the earnings of these companies are expected to grow well. The total sales of these companies may grow by 3.9 percent in the first quarter of FY 2025, which is the slowest growth since the September 2020 quarter.
Large cap and mid cap stocks will see lower earnings. Small caps will perform well and margins will also improve. However, if we exclude the energy sector, earnings of our large cap and mid cap samples could grow by 14 per cent and 15 per cent, respectively, which will be in line with the performance of small caps.
The results season is starting and initial estimates look a little weak. With raw material costs remaining stable and prices falling, the phase of margin expansion seems to be coming to an end, which could be reflected in earnings and valuations.