Nifty 500 Q4 recap: Domestic cyclicals fuel strong quarterly performance, says Motilal Oswal

However, global cyclicals such as Oil & Gas (O&G) and metals dragged down the index, the report said.

Nifty-500 companies recorded a 7% increase in sales, a 13% rise in EBITDA, and a 13% jump in adjusted PAT, reaching approximately Rs 35 lakh crore, Rs 6.7 lakh crore, and Rs 3.9 lakh crore respectively.

“The earnings performance of Nifty-500 companies in FY24 was more broad based than in FY23. The top 100 companies by market cap accounted for 65% of incremental profit (with 75% of profit pool) vs. 91% of incremental profit (with 82% of profit pool) in FY23,” says Gautam Duggad, analyst at Motilal Oswal.

Also read: Motilal Oswal initiates coverage on Mankind Pharma with target price of Rs 2,650Sectorally, remarkable earnings growth were displayed with auto at 83% YoY growth and BFSI at 24% YoY. Banks within BFSI saw a 26% YoY growth, making up 64% of the sector’s earnings.On the other hand, declines were observed, with earnings down 51%, 21%, and 12% YoY for chemicals, metals and oil & gas respectively while capital goods and cement sectors grew by 31% and 18% YoY, respectively.The FY23 earnings were much more skewed in favor of the Nifty-50, but in FY24 the distribution was relatively symmetric. Among them, BFSI, Oil & Gas, and Auto drove a majority of the incremental earnings in FY24 as the top 10 companies by market capitalization contributed only 18% to the incremental YoY earnings in FY24 vs 68% in FY23, the report added.

The 3.3% CPI reading in May was the kind of positive reading that the Federal Reserve was pinning its hope on after a disappointing first quarter this year. The reading goes on to add more grist to Chair Jerome Powell’s belief that inflation is moving gradually towards the 2% target, even if it might be doing so on a somewhat bumpy path.

As far as the economic projections are concerned, I would be cautious about putting too much weight on the expectation of just one rate cut this year. Chair Jerome Powell has pointed out that these projections come with “a slight element of conservatism” and are data-dependent, which is another way of saying that there could be more than one rate cut in the year, provided we have a string of positive, confidence-inducing inflation results.”

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