A slew of companies is lined up on Monday to declare their quarterly results. Benchmark indices made a strong opening on Monday, extending gains to the third session in a row. The BSE Sensex and the NSE Nifty 50 jumped more than 1 per cent in early trades.
Companies declaring their result today include Larsen & Toubro, Bharti Airtel, Tata Steel, Castrol India, Equitas Small Finance Bank, Motherson Sumi Wiring India, 3i Infotech, VST Tillers, and LT Foods.
Here’s a Q2 preview of Tata Steel, Bharti Airtel and Larsen & Toubro’s results:
Tata Steel Ltd
Analysts see a weak quarter for the steel major in Europe as well as in India, led by a fall in steel prices, lower volume and higher energy costs. In addition, the duty on exports hurt the industry as a whole in India.
Edelweiss Securities expects Tata Steels’ profit to fall 79.1 per cent YoY (year-on-year) to ₹1,630 crores and sees its sales figure at ₹ 57,250.80 crores.
Motilal Oswal sees Tata Steel’s net profit dropping 84.6 per cent YoY at ₹ 1,757.70 crores on a 3.9 per cent YoY rise in sales at ₹62,770.80 crores.
Market observers are watching for the management’s guidance on Europe operations and the impact of the depreciating British pound (against the dollar). In addition, they will be looking for Tata Steel’s debt status post the acquisition of Neelachal Ispat Nigam. This acquisition was done through its step-down subsidiary, Tata Steel Long Products.
Bharti Airtel Ltd
The telecom company is likely to report a good set of numbers. It has factored in a net subscriber addition of 20 lakh and an average revenue per user (ARPU) of ₹188.
Emkay Global sees Airtel’s profit doubling to ₹ 2,274.90 crore and its sales climbing 19.2 per cent to YoY to Rs 33,752 crore. Further, it sees an addition of 20 lakh subscribers and 45 lakh addition in data.
According to an estimate by analysts at IIFL Securities, the company added 6.5 million 4G subscribers in Q2 versus 4.5 million in Q1. However, they estimate a 3.5 per cent sequential decline in EBITDA (in USD terms) for Airtel Africa on account of the depreciation of local currencies and inflationary pressure in Nigeria.
A few important management insights that are to be watched out for are ARPUs across markets and segments, pricing action, margin drivers and outlook on subscriber additions.
Larsen & Toubro Ltd
The company has announced orders in the range of ₹ 6,500- 13,500 crore during the quarter. Moreover, a strong tender pipeline from the domestic and export markets is likely to drive order inflows.
Motilal Oswal sees L&T’s consolidated revenue to grow at 17.1 per cent YoY, led by growth in IT, infrastructure, heavy engineering and hydrocarbons.
JP Morgan expects a strong quarter for the company led by its engineering and construction business. According to it, a decline in steel prices is likely to benefit fixed-price contracts which form 33 per cent of its total orders.
Some of the key factors to watch out for are management commentary on various segments, order prospects for the second half of the current financial year, and trends in the core engineering and construction business.
Written by Simran Bafna
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