New Delhi, April 10: Equirus Securities has released its earnings preview for the fourth quarter of FY26, highlighting modest core earnings growth across its coverage universe on an ex-OMC basis, with performance led by Autos, Metals, NBFCs, and FMCG sectors.
According to the report, revenue, EBITDA, and PAT are expected to grow by approximately 12%, 8%, and 8% year-on-year, respectively (excluding Oil Marketing Companies), compared to headline growth of 18%, 6%, and 5%. The growth momentum, however, remains uneven across sectors, reflecting broader macroeconomic and industry-specific challenges.
Sectoral Highlights:
- Autos: Strong performance driven by robust OEM wholesales (2W +25%, PV +14%, CV +20–25%). Volume growth and improved realizations support revenues, though margins may face sequential pressure due to rising raw material costs.
- Metals: Recovery led by improved steel prices and operating leverage, alongside strength in iron ore. Aluminium shows improvement, while coal remains weak.
- NBFCs & Financials: Stable net interest margins with a slight negative bias. Credit growth remains healthy, and asset quality is stable. NBFCs continue to outperform within BFSI, delivering strong PAT growth of ~14–15% QoQ.
- Consumer Staples: Expected to deliver steady growth (~13% revenue, ~11% EBITDA YoY), supported by volume recovery, though seasonal weakness may impact select categories.
- Consumer Durables: Growth remains largely price-led, with improved momentum in room air conditioners and value-driven segments, albeit with mild margin pressures.
- Building Materials & Cement: Demand recovery supported by restocking and pricing discipline, though input cost pressures—especially fuel—are likely to persist in the near term.
- Chemicals: Gradual recovery led by agrochemicals and specialty segments, supported by export stabilization and improving demand visibility.
- Real Estate: Selective growth driven by new launches, with strong traction in key markets. Pre-sales and collections remain stable, though realizations are plateauing.
Key Areas of Pressure:
- Airlines: Weak quarter due to geopolitical tensions, rising aviation turbine fuel (ATF) costs, and rupee depreciation, leading to margin compression.
- Industrials: Mixed trends with improved government project execution but subdued private sector demand.
- Healthcare: Moderation in key products and seasonal weakness impacting margins; pricing and pipeline execution remain critical.
- Information Technology (IT): Soft growth amid macro uncertainty, with delayed deal conversions despite steady deal wins.
- Oil & Gas: Volatility driven by geopolitical factors impacting crude and LNG prices, affecting margins of oil marketing companies.
Outlook:
Equirus Securities noted that overall profitability remains under pressure, particularly in aviation and industrial sectors, though partially offset by strength in cyclicals such as metals and select consumption segments. Growth is expected to remain sector-specific and uneven, with resilience in domestic demand-driven sectors and continued challenges from global uncertainties.
