The first quarter of FY25 saw mixed results for companies, with some sectors like healthcare, real estate, and metals performing well, while Oil Marketing Companies (OMCs) dragged down overall earnings, according to a report by Motilal Oswal Securities Limited (MOSL).
Nifty-50 companies’ earnings grew by 4% year-on-year, slightly above expectations. However, excluding the OMCs, the growth was stronger at 9%. Looking ahead, MOSL expects earnings growth to slow down to around 15% between FY24-26, with key sectors like industrials, consumer goods, real estate, and PSU banks leading the way.
Despite positive results in many areas, some companies saw a significant drop in their profits. Here’s a closer look at three major Nifty stocks that experienced a sharp decline of more than 25% in their profit after tax (PAT) during the June quarter.
Asian Paints
Asian Paints reported a 25% drop in net profit, down to ₹1,170 crore from ₹1,383 crore in the same period last year. The company’s revenue for the first quarter fell by 2.3% to ₹8,943 crore, mainly due to earlier price cuts and changes in its product mix. Even though the domestic decorative business saw a 7% increase in volume, revenue still dropped by 3%. Total expenses also rose to ₹7,559.04 crore. The stock has decreased by nearly 4% over the past year and more than 10% so far in 2024.
JSW Steel
JSW Steel’s net profit plummeted by 64% to ₹845 crore, falling far short of market expectations. Although revenue rose by 2% year-on-year to ₹42,943 crore, the company’s EBITDA dropped by 22%, with margins shrinking to 12.8%. The production of crude steel decreased by 3% year-on-year, while sales increased by 3%. Despite these challenges, the stock has gained over 15% in the last year and more than 3% in 2024.
BPCL
Bharat Petroleum Corporation Ltd (BPCL) saw a massive 73% drop in net profit for the June quarter, down to ₹2,841.55 crore from ₹10,644.30 crore the previous year. This was mainly due to lower refinery margins and reduced fuel prices, which hit marketing margins hard. The company’s revenue slightly dipped by 0.1% to ₹1.28 lakh crore, while total expenses increased by 8.5%. Despite the profit drop, BPCL’s stock has soared by over 88% in the past year and more than 47% in 2024.
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