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Q2 Review: 34 stocks in the Nifty50 index saw EBITDA margin expansion in September quarter

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In a recent report, brokerage house Motilal Oswal pointed out that 34 out of 50 companies in the Nifty50 index have seen an expansion in EBITDA margin.

Q2 Review: 34 stocks in the Nifty50 index saw EBITDA margin expansion in September quarter
In the recently concluded 2QFY21 results, Nifty companies reported a broad-based earnings beat, leading to healthy 9-10 percent earnings upgrades in FY21 estimates.
In a recent report, brokerage house Motilal Oswal pointed out that 34 out of 50 companies in the Nifty50 index have seen an expansion in EBITDA margin. However, 16 companies saw EBITDA margin contraction in the quarter. All key sectors, barring Capital Goods and Utilities, also reported operating margin expansion in Q2.
Among individual companies, a major expansion was seen in JSW Steel, Divi’s Lab, IOC, Ultratech Cement and Sun Pharma, as per the MOSL report. These saw EBITDA Margin expansion in the range of 600bps to 910 bps YoY.
Meanwhile, Coal India, ONGC, Titan, ITC and Eicher Motors posted a contraction of 480 bps, 440 bps, 430 bps, 280 bps and 240 bps YoY, respectively, in EBITDA margins, it added.
Going forward, the brokerage expects some elements of profit and loss (P&L) costs to make a comeback as the economy opens up more and travel costs and other overheads gradually return.
Also, raw material costs are going up sequentially for several sectors like consumer, auto, and cement, it further noted. Cost reduction has been factored in, and consequently, there is limited room for surprises now, according to MOSL.
Hence, the margin expansion is likely to moderate in the second half of FY21, it added.
In the September quarter, ex-Financials, Nifty reported 310bps YoY EBITDA margin expansion to 19.8 percent. For the third quarter, the brokerage sees a 140 bps expansion to 18.2 percent for Nifty (Ex-financials, while 110 bps expansion is expected in the fourth quarter.

Market Movers

CompanyPriceChng%Chng
IndusInd Bank999.25 23.45 2.40
Maruti Suzuki7,301.10 60.85 0.84
Coal India143.15 0.70 0.49
IOC104.40 0.45 0.43
SBI Life Insura1,109.30 4.15 0.38
CompanyPriceChng%Chng
IndusInd Bank999.75 24.10 2.47
Maruti Suzuki7,299.10 57.65 0.80
M&M748.60 3.20 0.43
Bajaj Finance6,243.85 12.65 0.20
ITC209.00 0.35 0.17
CompanyPriceChng%Chng
IndusInd Bank999.25 23.45 2.40
Maruti Suzuki7,301.10 60.85 0.84
Coal India143.15 0.70 0.49
IOC104.40 0.45 0.43
SBI Life Insura1,109.30 4.15 0.38
CompanyPriceChng%Chng
IndusInd Bank999.75 24.10 2.47
Maruti Suzuki7,299.10 57.65 0.80
M&M748.60 3.20 0.43
Bajaj Finance6,243.85 12.65 0.20
ITC209.00 0.35 0.17

Currency

CompanyPriceChng%Chng
Dollar-Rupee74.46000.00000.00
Euro-Rupee88.02700.01500.02
Pound-Rupee103.3280-0.0310-0.03
Rupee-100 Yen0.67830.00010.01