Q2 FY23 Results Review - Resilience Personified Amid Global Pandemonium: Motilal Oswal

Motilal Oswal Report

Corporate earnings for Q2 FY23 were better than our expectations, despite several headwinds, with financials driving the quarter once again. The spread of earnings has been decent with 66% of our universe either meeting or exceeding profit expectations.

We reckon the upside from hereon will be a function of stability in global and local macros and earnings delivery. Management commentaries indicated margin pressure would likely to continue for another quarter, as the full benefits of commodity price alleviation will be seen in Q4 FY23.

Technology sector saw good performance in Q2 FY23. Though companies have not seen any impact on the pipeline yet, a few companies noted small pockets of demand weakness led by ongoing macro headwinds, especially in retail, manufacturing and hi-tech. The companies’ strong order book and pipeline render comfort on near-term growth.

For the consumer sector, overall performance in Q2 FY23 was majorly driven as volumes remained subdued on a higher base. Rural India continued to deliver a weak performance, with no clear signs of recovery over the next few months.

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