BFSI Outperformance In Q2 FY23 Lifts Overall Nifty EPS: ICICI Direct

ICICI Direct Report

Global markets have found comfort in recently released lower than expected inflation readings with growing expectations of a decline in pace of interest rate hikes by global central banks amid already existing growth concerns.

Domestic markets have been outperforming their global counterparts and hit a 52-week high in the current week amid healthy growth prospects domestically.

On the earnings side, quarterly earnings in Q2 FY23 were at 9%, ahead of estimates wherein Nifty earnings per share came in at Rs 185/share versus our estimate of Rs 170/share. It was up 4.5% QoQ, 2.8% YoY.

The key outperformance was driven by index heavy banking, financial services and insurance space, especially corporate banks as well as oil and gas, pharma and capital goods domain.

In the banking space, key positives were a revival in business growth (~17-18% YoY), improvement in margin (~5-25 bps QoQ) and declining non-performing asset ratio with healthy provision coverage ratio.

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