Q2FY24 Highlights: A Snapshot of Key Companies

In the recent management calls up to October 18, several Indian companies shared their outlook and performance updates. Let's take a closer look at the highlights from these discussions:

TCS: The company anticipates improved revenue from order wins in H2, but uncertainties regarding discretionary spending and project ramp-downs persist.

INFY: While trimming its upper-end guidance by 1% due to a continued slowdown, Infosys expresses confidence in achieving an EBITM of 20-22%. Margin expansion is expected, driven by the 'Maximus' program.

HCLT: Projections for discretionary spending in the upcoming budget cycle are challenging. The company reported a 150 bps margin improvement in Q2 and maintains its margin guidance for the year.

ZENSAR: The company expects to maintain margins in the range of 14-16% and plans to reinvest above these levels for growth. Emerging service lines, including experience, data, and advanced engineering, are gaining traction.

LTTS: Despite cutting its guidance, LTTS reports a higher number of deals in the pipeline. Factors include an elongated United Worker Strike (UWS) and potential execution delays due to the Israel war. Margin guidance for FY24E is 17%, increasing to 18% in H1FY26.

LTIM: Forecasts suggest better growth in 2HFY24 compared to 1HFY24. Q3FY24 is already witnessing robust deal activity, and the company is confident in achieving a 17-18% margin by FY24's end.

HDFCB: Disbursements set a new record at ₹48,000cr during the quarter, with an aim to achieve an ROA of 1.9%-2.1% by the end of FY24.

FEDERAL: The company anticipates an NIM of 3.25% for FY24, a C/I ratio of approximately 50% by FY25, and steady RoA. Credit cost guidance remains at 40bp for FY24.

HDFC LIFE: The focus is on growing Value of New Business (VNB) in line with APE and maintaining VNB margin in FY24 compared to FY23. Margin improvement is expected in FY25, with an estimated ~18% VNB CAGR over FY23-25 and a margin of ~28.5% by FY25.

LOMBARD: The company expresses confidence in achieving high-teen growth in FY24, with a combined ratio reaching 102% by FY25 end. Competition in the motor insurance segment remains elevated.

ANGEL: The company is integrating its Super App Platform with lending partners and plans to offer consumer credit products, targeting customers with ticket sizes of ₹50lakh - ₹1cr. In wealth management, a focus on similar customer segments is planned.

CANFIN: The company guides for long-term sustainable spreads of 2.5%, NIM of 3.5%, and RoA >2%. Expectations include 18% loan growth, 20% disbursement growth in FY24, credit costs of ~10bp, and disbursements of ~INR3000cr in 3QFY23.

BAJAJ AUTO: Domestic 2W industry growth is expected to be 12-15% YoY during the 33-day festival season. Exports are improving, aiming to increase monthly production capacity to 10,000 units by the end of FY24.

CEAT: Exports in DD are expected to improve from the end of 3Q, with a forecasted 4% QoQ increase in the RM basket in Q3. The company aims for ROCE to improve to 14-16% by FY25/26.

CYIENT DLM: No significant changes in business engagements have been observed from Israel. The company aims to maintain double-digit margins going forward and has won new projects worth $16.4 million in Q2FY24, to be executed over the next 2-5 years.

DALMIA: Expectations include reduced costs in the coming quarters. The company maintains a capex guidance of ₹6500cr for FY24. With improving DD, a price hike of ₹30/bag has been implemented in the south.