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Mumbai7 minutes ago
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- Cipla, Glenmark, Sun Pharma and Dr. Reddy’s to perform well in pharma
- Reliance Industries, Bharat Petroleum and Hindustan Petroleum can
Nifty-50 companies may perform better on an annual basis. The benefit of these companies may increase by double as compared to the same period last year. This is because at that time they suffered a large number of provisions and losses due to corona.
In fact, based on any possible assessment, companies make a provision of how much loss or profit can be made in the future. Last year, companies had to provision more for losses due to Corona.
Estimates of brokerage houses
Different estimates from different brokerage houses suggest that the revenue of these companies may grow by 20%. While the net profit may be double that of the previous year. Talking about the quarterly basis, their revenue can grow by 18% and profit by 2% in the March quarter. Brokerage houses predict that the cyclical sector, which includes metals and autos, may contribute better to the growth of companies.
Raw material pressure will remain
However, there will also be pressure on companies to increase raw material prices along with cost and fuel. This can affect the operating margins of companies. There has also been a lot of recovery since last year’s lockdown. However, this year, once the lockdown starts in part, companies may face difficulties in the first quarter.
Freight has also increased
According to brokerage houses reports, freight or transportation rates have increased more than double on some routes over the past few months. This can lead to an increase in operating costs. Brokerage houses believe that even though the second phase of Corona is visible, companies will perform well. They believe that the recovery in the economy in FY 2021-11 will be shocking. This will happen when the second phase of the corona is under control at some time.
Talking about Nifty-50 companies, its earnings per share can increase by 36% in 2021-22. Banking, infotech, automobile and finance will be major contributors in this.
Automobile sector margins will see pressure
According to analysts, when it comes to the automobile sector, pressure on its margins could be seen. Because raw material prices have gone up. There has been a demand for borrowings in the banking and finance sectors. In particular, there has been a good demand for home loans in some parts due to lower interest rates. Along with this, banks have given good loans in the retail segment as well.
Cement demand may remain stable
Talking about the cement sector, there has been a steady demand in it. There has been a demand for infra and low-cost home projects. In this, companies such as ACC, UltraTech Cement, Ambuja can see volume growth of 10-12%. There has been a good demand from villages in the FMCG sector. However, due to the high prices of raw materials, these have been affected. In this sector, companies like Tata Consumer Products, Asian Paints, Britannia and Nestle can benefit.
The oil and gas sector will benefit from strong refinery utilization. Their demand decreased last year. But this year its demand has again come back to the previous level of Corona. Reliance Industries, Bharat Petroleum and Hindustan Petroleum can benefit from this.
Pharma sector will perform best
Pharma is one sector that could benefit more from Corona. Companies like Cipla, Glenn Mark will benefit in this. However, companies that manufacture corona medicines will benefit from this. Sun Pharma and Dr. Reddy can also do well in this sector.