In a recent report, JM Financial Institutional Securities pointed out the lack of evidence of pickup in rural demand in corporate commentary for the past quarter. This was reflected in the underperformance of the FMCG sector in the last year. JM Financial also highlighted the prevalent risk-on sentiments in 2024, with small and mid caps outperforming over Nifty in the last month.
The report also predicts that 2024 will be the year of large caps over SMID, as asset allocators prioritize valuation comfort. The most notable sectoral outperformance came from utilities, energy, and pharma, while FMCG consistently underperformed the benchmark in the last year. According to the report, 66% of the companies in JMFL coverage universe either met or beat expectations in Q3 FY24.
The report also highlighted that revenue growth of 5.7% YoY in companies under coverage (exc. BFSI) missed estimates by 2.3%. EBITDA margin of 17.5% exceeded expectations, but has tapered sequentially from 18.7% in Q2FY24. Margins exceeded expectations in sectors like ports, metals, oil & gas, and utilities, while chemicals and media missed expectations.
Additionally, the report noted that emerging market equities gained 4.7% in the last month, while Nifty underperformed the EM and DM basket by a wide margin. The entire commodity basket also saw a gain of 3.2%, with crude prices up by 5.1%.
Overall, the report provides insights into the performance and expectations of various sectors in the market, shedding light on the dynamics of corporate commentary and market trends in the current landscape.
