Will Bharti Airtel be only Nifty company to post loss in Q1 FY19? Motilal Oswal points out harsh possibility

As the first-quarter FY19 earnings season begins, Motilal Oswal Securities’ has said that Bharti Airtel will be the only Nifty firm which is expected to post a loss in Q1 FY19.

Airtel will now undertake wide-scale deployment of the cutting-edge technology in key business and residential hubs across Kolkata (Reuters)
Airtel will now undertake wide-scale deployment of the cutting-edge technology in key business and residential hubs across Kolkata (Reuters)

As the first-quarter FY19 earnings season begins, with heavyweight companies Infosys, RIL, HDFC Bank all set to release their report cards in the coming weeks, Motilal Oswal Securities’ has said that Bharti Airtel will be the only Nifty firm which is expected to post a loss in Q1 FY19. The domestic research and brokerage firm Motilal Oswal Securities has said that the “overall picture is looking brighter” despite a deterioration in macros with the escalating volatility amid the global trade environment.

In its latest ‘India Strategy’ report, Motilal Oswal Securities has pointed out that India’s largest telecom company Bharti Airtel is “the only Nifty company expected to post a loss in 1Q FY19”. Further, Motilal Oswal Securities has said that the telecom universe will report a loss in Q1 FY19 with chances of Aditya Birla Group’s telecom firm Idea Cellular’s loss remaining elevated. If this happens then this will be telecom’s fourth consecutive quarter of losses.

Bharti Airtel’s India wireless revenue should remain flat on quarterly basis yet India wireless EBITDA is expected to witness 13% QoQ decline dragging down consolidated EBITDA by 4% QoQ, Motilal Oswal Securities said in the report. “Spillover of the fresh round of undercutting by operators from 4Q FY18 to 1Q FY19 continued to take a toll on telcos’ revenue,” it said.

Stocks to watch today
Stocks To Watch: Hindustan Zinc, Tata Consumer, Tata Elxsi, Vedanta, Reliance
Share Market Today, Share Market Live, Stock Market
Stock Market Live: Markets trade higher! Nifty above 22,400, Sensex up 250 points; Nifty Midcap 100 at 50,000
Tata Elxsi share price dipped more than 5%
Tata Elxsi slides over 3% despite Rs 70/share dividend announcement- Find out what’s triggering the selling?
Hindustan Motors share Price Today
Hindustan Motors surges 10% intra-day: All eyes on Q4 earnings

“Further, consolidation in the telecom sector had fuelled the exit of tenancies, leading to higher tenancy cost per operator. This, coupled with installation of cell sites on fresh towers (non-loading) and soaring diesel prices, is expected to increase the QoQ network cost for all operators,” Motilal Oswal Securities report added.

However, on a collective basis, quarterly sales of Nifty companies are estimated to grow at 22.7% YoY while PAT (Profit After Tax) will grow at 25.7% YoY (highest since June 2014), Motilal Oswal Securities said. “The confidence on earnings recovery is higher today than any time in the recent past,” the report noted.

Going forward in FY19, it will be a case of “improving micros and challenging macros,” Motilal Oswal Securities said. Amid the challenging macros, Motilal has hinted towards crude oil price inflation, currency, rising bond yields. With the higher growth in MSPs (Minimum Support Prices), and the peaking of headline and core inflation at 5.4% and 6.4%, respectively, in June 2018, Motilal Oswal Securities is expecting a hike in policy rates by 25 basis points by the Reserve Bank of India on 1 August 2018.

If you are keen to know more about Nifty 50 and BSE Sensex levels and seek expert advice on what’s driving the gains and how to build your portfolio, track the latest stock market stats, share market news and top brokerage bets on Financial Express. Download the Financial Express App for the fastest and most reliable business news alerts, key investment strategies and latest movers and shakers from across financial market.

First published on: 10-07-2018 at 16:25 IST
Market Data
Market Data
Today’s Most Popular Stories ×