The net profit of nearly half of the Nifty 50 companies, which have announced their results so far, grew 29% in the March 2022 quarter from the same period a year ago. Out of them, earnings of 12 companies including
NSE -1.90 % Suzuki,
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SBI Life Insurance
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NSE -0.93 %, Kotak
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Earnings of 27 Nifty stocks have risen 21.38% in the quarter ended March 2022. The earnings reflected the growing pressures of rising input and wage costs on profitability.
"The changing macro backdrop with heightened worries on rising rate and liquidity tightening is impacting the global markets," said Gautam Duggad, head of research at Motilal Oswal Financial Services. "However, the earnings season continues to remain healthy, notwithstanding the challenges on multiple fronts."
Results of IT companies were a mixed bag, but most of the companies delivered good deal wins and highlighted a strong pipeline. Analysts said these companies are facing margin pressures, while their valuations are still elevated. Further earnings downgrades are likely, which could weigh down their stock prices, they said.
Asset quality of private banks continued to improve with moderation in credit costs and NPA ratios, while the restructured book also dropped sequentially. But with consumption demand slowing and interest rates rising, analysts do not expect a sharp rebound in these shares. Moreover, foreign investors are cutting their holdings in Indian financials.
In the case of consumer staples, volumes continued to remain weak --- ranging from erosion in growth to a low-single-digit uptick.