Auto, healthcare beat estimates, Q3 delivers resilient earnings: CITI report

The third quarter of FY24 delivered resilient earnings with BSE 100 and Nifty posting an 18 percent and a 13 percent growth in EBITDA over the last year, a latest India Equity Strategy report by CITI says.  Auto and healthcare, according to the report, were the key sectors which beat the earnings estimates, while financials and materials missed the projection.

Also read: Can Q3 earnings report card re-rate the markets from here?

For the quarter, according to the report, autos, industrials, materials and utilities drove headline earnings growth against expectations. On the other hand, sectors such as  industrials, energy and healthcare saw ‘beats’, while staples and discretionary (excluding autos) saw a ‘miss’ on EBITDA growth.

CITI analysts are overweight on state-run utilities and defence, industrials, banks and insurance. They are underweight on consumer discretionary, IT services and metals, while neutral on autos and transportation, consumer staples, NBFCS, Real Estate and Cement. In terms of stocks, their preferred list includes Maruti, Eicher Motors, Cholamandalam Investment & Finance, HDFC Bank, ICICI Bank, SBI Life, BPCL, GAIL and L&T.

Also read: Q3 earnings: Cyclicals drive show amid margin boost; consumer staples in hot water

Going forward, the report suggests that their analysts will be closely watching for the outcome of the general elections, although the recent state elections and incremental opinion polls suggest low probability of any surprise. Additionally, Citi global economists see a global growth slowdown and US recession ahead and India economists expect delays in the rate cut cycle.

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