India Strategy : Nifty50 Analyser - February 2025 By JM Financial Services
In our Nifty50 Analyser we take a close look at Nifty50 EPS movements in Feb’25. In the last 12 months from Feb'24 to Feb'25, the Nifty50 has broadly remained flat, while both FY25E and FY26E EPS estimates saw a cut of 5.8%. Downward revisions in EPS estimate across FY25-27E continued in Feb'25 as well (Jan’25 saw EPS cuts of 1.4-2.8% over FY25E-27E) with EPS cuts to the tune of 0.5-0.9%. 60% of Nifty50 companies saw EPS cuts in Feb’25 (v/s72% in Jan’25). While EPS cuts have been broad based, Banks, Cement, Oil & Gas, and Consumer witnessed EPS cuts >1%.
* Feb’25 saw 0.5-0.9% EPS cuts in Nifty50 EPS over FY25E-27E: In the last 12 months from Feb'24 to Feb'25, the Nifty50 has broadly remained flat, while both FY25E and FY26E EPS estimates saw a cut of 5.8%. Downward revisions in EPS estimate across FY25-27E continued in Feb'25 as well with EPS cuts to the tune of 0.5-0.9%. (Jan’25 saw EPS cuts of 1.4-2.8% over FY25E-27E).
* 60% of Nifty50 companies saw EPS cuts in Feb’25 (v/s 72% in Jan’25): In Feb’25, 30 Nifty50 companies saw a cut in FY26E estimates. This included: (1) Consumer: 7 out of 8 companies in the Nifty50 (88%), (2) Banks: 5 out of 6 companies in the Nifty50 (83%), (3) Automobiles: 5 out of 6 companies in the Nifty50 (83%), (4) Oil & Gas: 2 out of 3 companies in the Nifty50 (67%), and (5) Metals & Mining: 3 out of 5 companies in the Nifty50 (60%). In Feb’25, 12 Nifty50 companies (24%) saw an upgrade in FY26E EPS estimates. This included: (1) Insurance: 1 out of 2 companies in the Nifty50 (50%), (2) Metals & Mining: 2 out of 5 companies in the Nifty50 (40%), and (3) Utilities: 1 out of 2 companies in the Nifty50 (50%) saw EPS upgrades.
* Sector wise movements in EPS: Sectors which witnessed >1% EPS cuts include: Banks (1.5%), Cement (1.6%), Oil & Gas (1.5%), and Consumer (3.3%). Sectors which have been slightly immune to EPS cuts in Feb’25 with cuts <1%, include: IT Services (0.1%), Pharmaceuticals (0.1%) NBFCs (0.1%), Automobiles (0.8%), Utilities (0.2%), and Infrastructure & Ports (0.5%). Sectors which witnessed EPS upgrades include: Industrials (0.9%), Insurance (0.1%), Metals & Mining (0.2%), and Telecom (5.7%).
Nifty50 flat YoY, while FY26E EPS estimates cut by 5.8% over the last 12 months
* In the last 12 months from Feb’24 to Feb’25, the Nifty50 has broadly remained flat, while both FY25E and FY26E EPS were cut by 5.8%.
* In Jan’25, we saw a large downward Nifty50 EPS revision of 1.4-2.8% over FY25E-27E, which clearly showed that companies are missing Q3FY25 expectations. In Feb’25, FY25- 27E EPS estimates were further revised downwards to the tune of 0.5-0.9%.
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