Mumbai: India Inc may report a slowdown in earnings growth for the fourth quarter of 2006-07 mainly due to skewed expectations for banking and energy firms, although IT sector is likely to keep up the momentum set by sector bellwether Infosys.
For the March 2007 quarter, global financial services major Citigroup expects 26% profit growth for Sensex excluding oil companies, which would be slower than the last couple of quarters.
While this quarter could help 2006-07 end as the fifth straight year of 25-30% earnings growth, it would also mark the end of such high growth figures. Overall earnings growth is expected to moderate at around 15-16 per cent in 2007-08 and 2008-09, analysts at Citigroup said in their Q4 preview report.
Religare Securities said it expects India Inc to report another strong performance with aggregate fourth quarter earnings up 34% and operating profit projected to grow at a robust 30% this year.
“We expect cement, telecom, pharma and auto ancillary sectors to lead the way in terms of earnings growth, while sugar sector will be laggard, reporting a de-growth in aggregate earnings,” Religare analysts said.
Being the last quarter of fiscal, results might carry less surprises and the focus would be on the year ahead. Guidance by IT firms could be a key factor to watch for on whether higher interest rates and tightening liquidity have started to bite into the growth story.
Among key results scheduled this week, IT majors like TCS, HCL Tech and Wipro would be disclosing their numbers.