Nifty Corporate Earnings Analysis –

Q4 | 2016

by Rajat Sharma | May 12, 2016

Yesterday we analyzed earnings trend for constituent companies of the S&P CNX Nifty. On year-on-year basis (Q4 2015 to Q4 2016) corporate earnings showed a growth of 14.7%. In comparison, average stock prices went down by 1.9% during the same period*.

* Based on stock prices as on 31st March for each year.
** Based on 26 of the 50 companies comprising the S&P CNX Nifty that have declared results as of the date of this article.

Current PE Valuation of the Nifty = 21.30

Excel Calculation – 26 Nifty Company Result

Key Points about Corporate Earnings for Q4:

The analysis is based on the results of 26 out of 50 Nifty companies which have declared earnings so far.
Note – from April 1, 2016, Nifty has excluded Cairn, Vedanta, and PNB and included Aurobindo Pharma, Bharti Infratel, and Eicher Motors
Earnings are improving while stock prices are showing a declining trend.
On year-on-year basis there is an average growth of 14.7% in profitability. The benchmark Nifty went down 9 % in the same period.
On a trailing basis markets remain expensive and are trading at valuations of 21.30 (PE).
Most sectors have shown considerable improvement in profitability.
Fundamentally (besides valuations) things are looking good at macro level.
Pharma, Metals, Construction, Oil and Gas , Power companies are yet to announce their earnings for Q4 of FY 2016.

WE WILL BE UPDATING THIS ARTICLE ONCE REST OF THE COMPANIES DECLARE THEIR RESULTS OVER THE NEXT 1 MONTH.

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