As the crucial corporate earning season gets underway, India Inc and stock markets are keeping fingers crossed.
As the crucial corporate earning season gets underway, India Inc and stock markets are keeping fingers crossed.
Some market experts feel that the results would continue to disappoint this quarter as well and will take another four-odd months to reflect the benefits of the surprise rate cuts by the Reserve Bank of India and globally declining crude oil prices.
Some others, however, feel that certain sectors may bring the cheer that can balance the under-performers.
Earnings of some of the India's largest companies may have fallen more than expected in the last quarter, making it the third consecutive quarter in which profits failed to match up to expectations.
It means that companies have posted disappointing quarterly results every quarter since BJP government came to power in May last year.
A K Prabhakar, an independent analyst, said, "The impact on IT sector will be disappointing in the coming weeks due to cross-currency issues but stimulus is to be seen in the US and Europe and thus one should foresee growth in it."
On other sectors, he said, "The oil drilling companies and retail sector could be seen taking a hit. Due to the online boom, the footfall at retail stores has come down."
The banking sector that has been pulling the strings on the Dalal Street for quite some time now has also been expected to show vulnerability. "One can expect the mid-cap to fluctuate more than large-cap in the coming weeks.
The impact on profits can be affected by higher bond yield which may be 3-5% on the negative side" said Deven Choksey, chief executive officer and managing director of KR Choksey Shares and Securities.
Ambareesh Baliga, another independent analyst, said, "The corporate results this March would be a negative trigger for the markets and PSU banks could feel the tremor as the non-performing assets are bound to rise till the economy starts to revive whereas private banks wouldn't be as much impacted."
India is expected to clock a growth rate of 7.4% in 2014-15 and over 8% in the current fiscal, and for this, say experts, the India Inc must deliver.
In the third quarter of 2014-15, automobile and power companies, among others, displayed weak profits in comparison to the other companies at Sensex and Nifty.
The consolidated profit for the December quarter of the 30 companies of Sensex observed their net profits decline by as much as 25% year on year, while for the 50 Nifty companies, it fell 19%.
Choksey said, "Oil is among one of the sectors that can be expected to put healthy numbers on the board in this quarter, owing to the lag effect of the lower global oil prices and the recent move by government to exempt subsidies."
ONGC, Oil India and GAIL (India), which together bore a subsidy burden of Rs 67,000 crore in FY14 and around Rs 43,000 crore in the first three quarters of FY15 may be spared the burden in the last quarter.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}