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Motilal Oswal expects these 5 stocks to report over 100% YoY PAT growth in Q2FY20

Updated : 2019-10-10 14:15:13

Markets have remained weak in Q2FY20 despite the sharp bounce back last month's corporate tax cut. According to Motilal Oswal, earnings risks continue to be tilted to the downside on account of the underlying weak demand scenario in the domestic economy. At this point, tax rate cuts will largely limit the downgrades rather than driving big upgrades on the earnings front, it added. Motilal Oswal Financial Services' profit before tax to grow 2 percent YoY but profit after tax is expected to decline 6 percent YoY, dragged by automobiles and metals. Private banks, FMCG, cement, and capital goods, however, will provide some respite. The brokerage expects the profit of these five stocks to rise over 100 percent in Q2:

<strong>Sanghi Industries:</strong> The brokerage expects the company to report PAT of Rs 15.1 crore, up 670 percent in Q2FY20. It said that realisations are expected to decrease 2.5 percent QoQ to Rs 4,448 per tonne due to marginally weaker prices in underlying markets. <strong>Key things to watch:</strong> <strong>i)</strong> Volume and pricing recovery for western region <strong>ii)</strong> Update on the expansion of projects
Sanghi Industries: The brokerage expects the company to report PAT of Rs 15.1 crore, up 670 percent in Q2FY20. It said that realisations are expected to decrease 2.5 percent QoQ to Rs 4,448 per tonne due to marginally weaker prices in underlying markets. Key things to watch: i) Volume and pricing recovery for western region ii) Update on the expansion of projects
<strong>India Cements:</strong> The brokerage expects the company to report PAT of Rs 8.1 crore, up 465.4 percent in Q2FY20. Realizations are expected to decrease by 6 percent QoQ to Rs 4,547 per tonne due to price weakness in the underlying markets of the South, the brokerage said. <br /><strong>Key things to watch:</strong> Demand visibility and pricing outlook in South India.
India Cements: The brokerage expects the company to report PAT of Rs 8.1 crore, up 465.4 percent in Q2FY20. Realizations are expected to decrease by 6 percent QoQ to Rs 4,547 per tonne due to price weakness in the underlying markets of the South, the brokerage said.
Key things to watch: Demand visibility and pricing outlook in South India.
<strong>Gujarat Gas: </strong>The brokerage expects the company to report PAT of Rs 159 crore, up 287.6 percent in Q2FY20. EBITDA per standard cubic meter (EBITDA/scm) is estimated at Rs 4.3 in Q2FY20.<br /><strong>Key things to watch:</strong> i) PNG industrial usage ii) CNG volumes iii) EBITDA/scm and ROE ratio
Gujarat Gas: The brokerage expects the company to report PAT of Rs 159 crore, up 287.6 percent in Q2FY20. EBITDA per standard cubic meter (EBITDA/scm) is estimated at Rs 4.3 in Q2FY20.
Key things to watch: i) PNG industrial usage ii) CNG volumes iii) EBITDA/scm and ROE ratio
<strong>Birla Corporation:</strong> The brokerage expects the company to report PAT of Rs 61.4 crore, up 276.7 percent in Q2FY20. Realizations are estimated to decrease 3 percent QoQ to Rs 4,804 per tonne, led by weaker pricing in the eastern markets, partially offset by better pricing in the north/central India. <br /><strong>Key things to watch:</strong> i) Volume growth recovery and outlook. ii) Cement pricing outlook and sustainability. iii) Update on the profitability of the acquired subsidiary of Reliance.
Birla Corporation: The brokerage expects the company to report PAT of Rs 61.4 crore, up 276.7 percent in Q2FY20. Realizations are estimated to decrease 3 percent QoQ to Rs 4,804 per tonne, led by weaker pricing in the eastern markets, partially offset by better pricing in the north/central India.
Key things to watch: i) Volume growth recovery and outlook. ii) Cement pricing outlook and sustainability. iii) Update on the profitability of the acquired subsidiary of Reliance.
<strong>ABB:</strong> The brokerage expects revenue growth of 10 percent YoY supported by strong growth in the discrete automation and motion, process automation and electrification product segments. Net profit is expected to improve 127 percent YoY to Rs 81.8 crore.<br /><strong>Key Things to watch:</strong> Management commentary on the outlook in light of current economic slowdown, especially across the auto, and food and beverage industries.
ABB: The brokerage expects revenue growth of 10 percent YoY supported by strong growth in the discrete automation and motion, process automation and electrification product segments. Net profit is expected to improve 127 percent YoY to Rs 81.8 crore.
Key Things to watch: Management commentary on the outlook in light of current economic slowdown, especially across the auto, and food and beverage industries.
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