Most companies have announced their September 2019 quarter results by now, and the outlook is a mixed one in a slowing economy. National Statistical Office data showed India’s GDP growth rate slowing down to 4.5% in Q2FY20. It is the slowest growth rate for the economy in the last six and a half years.
As we near the end of the third quarter, let’s have a quick review over the industries that outperformed in Q2FY20:
Pharmaceuticals: The pharmaceutical industry in India expanded 11.5% in Q2FY20 as per market research firm AIOCD-AWACS. Volume growth stood at 3.2%, while price growth was at 5.5%. Around 147 companies declared their September quarter results in thepharmaceuticals industry, out of which 88 firms posted positive profit growth while 59 declared negative profit growth.
The total revenue growth for these companies was 11.1% with total EBITDA growth of 18.8% and total operating profit growth of 17.5%.Sun Pharmaceuticals,Aurobindo Pharma and Dr. Reddy’s Laboratories are on top of the list based on the quarter operating revenue. Jenburkt Pharmaceuticals, Alembic and Amrutanjan Health Care are on top of the list based on net profit QoQ growth while Medi-Caps, Unichem Laboratories and Kabra Drugs have witnessed the highest net loss among the rest of the companies in the pharmaceutical industry.
Finance (including NBFCs): The diversified financial sector of India is undergoing a rapid expansion both in terms of strong growth of existing financial services and the entering of new entities in the market. Around 150 companies declared their September quarter results in finance (including NBFCs), out of which 76 companies published positive profit growth and 73 companies posted negative profit growth.
The total revenue growth for the finance industry was 11.1%.Power Finance Corporation, REC Ltd, Bajaj Finance, Reliance Capital and Shriram Transport are on the top list of the industry based on the quarter operating revenue in Q2FY20. Mehta Integrated Finance, Balmer Lawrie Investments and Polytex India are on the top based on net profit QoQ growth while Bampsl Securities, EPIC Energy and Dhenu Buildcon Infra Ltd performed badly with the highest net loss compared to the rest of the companies in this space.
Real Estate: Real Estate is among the most globally recognized sectors. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The investment in real estate rose to Rs 39,182 crore, up 19% from last year during the first three quarters. As per data from Cushman & Wakefield India, private equity investment stood at Rs 9,983 crore for Q2FY20.
Around 106 companies declared results from real estate sector, out of which 48 companies posted positive results and 57 negative results. Total revenue growth for the industry for Q2FY20 was 0.8%, while total EBIDT growth was 12.8% and total operating profit growth 11.6%.Prestige Estates, DLF and Indiabulls Real Estate are on the top list of the real estate industry based on operating revenues of the quarter declared in the September quarter results. Based on net profit QoQ growth, RTCL Ltd, Maxheights Infrastructure and Prime Property Development are at the top while Satra Properties, Radhe Developers and Prozone Intu Properties are the bottom three.
Specialty Chemicals: The specialty chemicals business performed well with strong demand witnessed in the overseas markets. This industry is likely to clock a growth rate of 12-13% over the next five years with the intensity of specialty chemicals in end-use domestic markets to rise, as per a report. “However, slowdown in the global economy is likely to hamper the overall growth potential for chemicals. Nevertheless, despite shutdowns in China and lack of capacity additions in other developed countries, India still stands to benefit in the export market,” CRISIL noted.
Around 72 companies declared September quarter results in the specialty chemicals industry, out of which 42 reported positive profit growth and 30 posted negative profit growth.BASF India, Pidilite Industries and Aarti Industries are on top of the list based on the operating revenue declared for the quarter. Based on the net profit QoQ growth, Generic Pharmasec, Vikas Ecotech and Crestchem are on the top list while AVI Polymers, CJ Gelatine Products and Organic Coatings are on the bottom list reporting negative net profit QoQ growth.
IT Consulting & Software: India is the leading source destination for the IT industry with a market share of around 55%. Around 68 companies declared September quarter 2019 results in IT Consulting & Software, out of which 37 companies reported positive profit growth while 30 other companies posted negative profit growth.
The total revenue growth for the industry was reported at 9.3%, total EBIDT growth at 7.6% and total operating profit growth at 7.2%. Tata Consultancy Services, Infosys, HCL Technologies, Wipro and Tech Mahindra are the top five performers in the stock market based on operating revenues for the quarter. Based on the net profit QoQ growth, CESC Ventures, 3i Infotech and Trejhara Solutions saw the strongest performance, while Empower India, Bharatiya Global Infomedia and Southern Infosys bottomed out with negative figures.
Dr. Sunil Sinha, Principal Economist of India Ratings and Research commented on the second quarter performance, “The 2QFY20 GDP growth at 4.5% is in line with India Ratings’ (Ind-Ra) projection of 4.7%. Also as expected the slowdown in GDP growth is largely on account of the slump in consumption expenditure and degrowth in exports. But for government expenditure growth, 2QFY20 GDP growth would have been much lower. Investment as measured by gross fixed capital formation in any case has been down for the last two quarters and again came in at just 1.0%. This shows that the economy is passing through a declining growth momentum and there is no easy way out. Therefore Ind-Ra believes under the current domestic and global macro environment the government will have to do the heavy lifting to support growth”.
|Hitesh Ramji Javeri||50|
|Globe Capital Market Ltd||44|
|Dheeraj Kumar Lohia||41|
|DSP Focus Fund - Reg - G||1.63%||1.47%||17.90%|
|BNP PARIBAS LARGE CAP FUND - Reg - G||0.80%||0.41%||17.08%|
|JM Multicap Fund - Reg - G||1.03%||-1.51%||15.86%|
|Canara Robeco Bluechip Equity Fund - Reg - G||1.05%||1.65%||15.86%|
|HSBC Large Cap Equity Fund - Reg - G||1.06%||1.66%||15.54%|
|Axis Small Cap Fund - Reg - G||-0.06%||0.22%||17.76%|
|SBI FOCUSED EQUITY FUND - Reg - G||0.46%||1.92%||16.55%|
|MIRAE ASSET EMERGING BLUECHIP FUND - Reg - G||0.96%||1.88%||13.72%|
|Sundaram Select Small Cap Series III - Reg - G||0.46%||0.13%||13.66%|
|Sundaram Select Small Cap Series IV - Reg - G||0.53%||0.13%||13.47%|
|Axis Bluechip Fund - Reg - G||0.95%||0.54%||17.91%|
|Aditya Birla Sun Life India GenNext Fund - Reg - G||0.69%||1.29%||14.81%|
|Sahara Growth Fund - Reg - G||1.31%||2.86%||14.56%|
|Axis Focused 25 Fund - Reg - G||1.10%||-0.29%||14.31%|
|Tata Large & Mid Cap Fund- Regular Plan - Growth - Reg - G||0.82%||1.16%||14.15%|