Q1 Nifty Earnings scorecard: Recovery setting in | Cement, Metals, Healthcare outperform

With Q1 results season nearing an end, its been a mixed performance by Nifty 50 earnings so far. As per ET NOW Poll expectations nearly 22% of nifty earnings by weightage have performed better than expectations, about 25% reported performance below expectations, 35% inline performance and the rest were mixed. Poonam Saney shares more details.

Sectors that have outperformed: Cement, Metals, Healthcare, and O&G
Sectors that have underperformed: Autos, NBFC, and Capital Goods have underperformed
Inline performance: IT, Consumer, and Private Banks

MOTILAL OSWAL SAYS
Mgmt comments indicate recovery is setting in
remain OW on BFSI, IT, Metals, Cement, and Capital Goods
Neutral on Consumer, Auto, and Healthcare
Underweight on Telecom, Energy, and Utilities.

Key drivers for Q1 performance:
*IT: best sequential performance, strong demand and strong deal pipeline
*IT: Cos guided for double digit growth and some even hiked FY22 guidance
*IT: high headcount addition, margin dip and rising attrition
*Cement: Strong price realization and better cost control
*Autos: impacted by High RM inflation and operating deleverage
*Consumer: Most Cos have reported double digit sales growth on a soft base
*Consumer: Cos were better prepared to deal with lockdown
*Consumer: robust performance by Jubilant, Asian Paints, United Spirits
*BFSI: Fresh slippages from retail sector; MFI SME sector under stress
*BFSI: most banks have high provision buffer
*BFSI: corporate credit cycle yet to pick up

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