Mumbai: The BSE Sensex earnings are set for their first quarterly drop in the three months to end-December, since the data was first made available in 1999, Morgan Stanley said in a research note.

“By our analysts’ estimates, the BSE Sensex earnings will drop 0.2% year-on-year compared with a growth of 5.5% and 20% in the September 2008 and June 2008 quarters, respectively,” the brokerage said.

A compression in EBITDA margins will likely offset revenue growth, analysts Sheela Rathi and Ridham Desai said in the research note.

They expect revenue growth at 14%, excluding the energy sector, and 7% including it.

The cycle of negative operating leverage, deceleration in net financial income and profit growth will continue and may lead to more negative earnings revisions, Morgan Stanley explained in its earnings preview.

“If earnings fall for the coming quarters, it should surprise nobody,” the note said.

The brokerage expects EBITDA margins will likely rise for healthcare, energy, and technology companies, while those of materials, industrials, utilities, and consumer discretionary goods companies may see a sharp fall.

The strongest growth is likely in technology, telecom, healthcare, consumer staples, and financials, it said.