JM Financial reports sharp cut in EPS by over 10% and target price for small and midcaps after Q2 earnings

In its net study JM Financial highlighted that aft anemic Q2 earnings, investors alongside the continuing correction connected the Street person turned jittery. Further it added that based connected the investigation of 157 companies who person reported retired of the JM Financial sum beingness of 275 companies, it highlighted that:

4% (69 companies) missed expectations, 41% (65 companies) bushed expectations portion 15% (23 companies) were inline.

27% (43 companies) person reported weaker gross maturation than expected.

There is simply a slowdown successful municipality request seen crossed FMCG, retail, car and promenade operators.

Chemicals and user durables person besides seen a moderation successful request (5) MFIs and prime backstage assemblage banks/ NBFCs witnessed accent successful their unsecured book. 

Now adding to the this, the brokerage successful different study dated November 14 pointed a important diminution successful EPS for tiny and midcap class on with the people price.

Adding the brokerage said that successful bid to ensure  that we instrumentality into information a broader view, we person besides analysed statement EPS and people prices revision station results for the JM Financial sum beingness and observe that:

66 per cent companies saw EPS cuts for FY25

45 per cent of the companies saw cuts successful people terms station Q2FY25

For FY25, a larger % of tiny and midcaps (SMIDs) witnessed EPS cuts (>0%, 3%, 5% and 10%) and

larger % of tiny and midcap (SMIDs) saw > 10% EPS chopped (17 per cent and 23 per cent of mid and smallcap companies saw EPS cuts of this scale). This fig was overmuch little astatine 10% for ample caps, added the report.

What this EPS chopped whitethorn mean for investors?

Generally, the earning per stock that is simply a profitability metric chopped whitethorn interaction investors negatively and their cognition of the stocks, its price, valuation and an wide concern strategy. In a emblematic environment, the EPS is evaluatd for amended informed decisions.