NIFTY50 index witnesses 23% YoY growth in PAT in Q3FY22; ICICI Securities sees index hitting 19,800 by March' 23

The NIFTY50 index witnessed a robust 23% YoY growth in PAT on a free float (FF) basis during Q3FY22. The growth was largely driven by financials and commodities, which together have a lion’s share of the profit pie at around 60%.  

"However, excluding commodities and financials, PAT declined 4% YoY driven by losses at TAMO in particular and the general rise in cost pressure (auto, cement, infrastructure, telecom) while getting support from IT, chemicals, tobacco, pharma, jewellery, staples and utilities," said ICICI Securities in a report.  

Based on earnings estimate by one quarter, brokerage firm ICICI Securities Mar’23 target for the NIFTY50 is 19,800. "As per the RBI’s latest forecasts, inflation (CPI) is expected to dip in FY23 to 4.5% (5.3% in FY22) which could mitigate cost pressures going ahead, while the opening up of the economy post the omicron wave is expected to improve capacity utilization rate (68.3% in Q2FY22). We expect NIFTY50 EPS to grow at a CAGR of 16-17% over FY22-24. Rolling forward our earnings estimate by one quarter, our March’23 target for NIFTY50 is 19,800," says the brokerage.  

Revenue sees 30% YoY growth 

Meanwhile, driven by higher commodity prices, exports, normalising demand and signs of input cost pass-through, NIFTY50 revenue also witnessed 30% YoY growth. Excluding commodities, the revenue for Nifty50 for Q3Fy22 stood at 11 per cent.  

There was across the board impact of rising costs (raw material for most companies and salaries for IT companies). EBITDA growth stood at 19% YoY, while it was 2% YoY excluding commodities. Credit growth improved across financials while credit costs dipped. 

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PAT to GDP to reach 4.7% by FY24 

The brokerage also sees aggregate listed corporates PAT, which rose 3x from the bottom of FY20 to reachRs9.5tn or 4.3% of nominal GDP on a TTM basis in Q3FY22, to jump to 4.7% by FY24. The growth in corporates PAT was led by metals, telecom, energy, PSU banks and private banks in Q3Fy22.  

For the year ended December 31, 2021, at 70% gain, Nifty Metal index was the top performer among NSE sectoral indices in 2021. Nifty IT and Realty indices have jumped 58.25% and 53.02% respectively as benchmark Nifty 50 index gained 23.79% in 2021. 

As on February 15, 2022, Nifty 50 was trading higher by around 10% in the last one year.  

Nifty Metal, Nifty Alpha 50, Nifty CPSE and Nifty Commodities were the top performing indices in the past one year as on February 15, showed technical data of NSE indices.