The Q1 earnings season has kicked off with a flurry of updates affecting both the Banking and FMCG sectors. Sharad joins us to discuss the companies in focus, revealing mixed performances that are stirring the market.
Titan’s Performance and FMCG Sector Insights
Titan:
- Growth: Registered a 9% year-on-year growth, the first single-digit growth since Q4 FY22.
- Challenges: Higher gold prices and fewer wedding days impacted growth.
FMCG Sector:
- Adani Wilmar: Achieved a 13% volume growth and double-digit revenue growth.
- Dabur: Expected to record mid to high single-digit growth in consolidated revenue, with the India business also reflecting mid-single-digit growth.
- Marico: Projected high single-digit growth in consolidated revenue, with a slight increase in margins anticipated for all three companies.
Banking Sector Updates
IndusInd Bank:
- Performance: Advances and deposit growth fell short of guidance, with CASA deposits declining for the sixth consecutive quarter.
Bank of Baroda:
- Growth: Showed single-digit growth in both advances and deposits, with sequentially weak numbers and an approved Rs. 7,500 crore fundraise.
Union Bank of India:
- Performance: Displayed muted performance, with advances up by 11% and deposits by 9%.
Jammu & Kashmir Bank:
- Guidance: Weaker-than-expected credit growth guidance.
AU Small Finance Bank:
- Performance: Largely in line with expectations, focusing on utilizing excess liquidity to reduce the cost of funds.
Other Key Updates
Info Edge:
- Performance: In-line billings but weaker revenue growth, expected around 22-23%.
Signature Global:
- Real Estate: Impressive 25% increase in collections, with overall collections doubling.
Tata Steel:
- Production: Delivered in-line numbers.
Sector Analysis and Market Expectations
With the Q1 updates trickling in, the market's focus is shifting towards upcoming earnings reports, particularly from TCS on July 11th. The Nifty IT index has shown gains, indicating strong expected numbers.
FMCG Sector:
- Post-election buzz and the budget’s potential push towards rural economy and demand could lead to an FMCG sector rally. With inflation under control and monsoons progressing well, FMCG stocks, excluding high-valued ones like HUL and Titan, may outperform.
Banking Sector:
- Divergence observed with Bank Nifty showing signs of weakness due to corrections and minor breakdowns in private sector banking stocks. However, the FMCG index is rallying with stocks like Britannia, Dabur, and Nestle showing breakout patterns.
In conclusion, while the Banking sector faces challenges, the FMCG sector shows promising signs of growth, driven by market dynamics and upcoming budget expectations. Investors should keep an eye on these sectors as more Q1 earnings reports come in.
