Mumbai: For the first time in ages, a Sensex firm other than Infosys Technologies Ltd is kicking off the earnings season. As Mint’s Mobis Philipose points out here Infosys has already lost the technology bellwether status to Tata Consultancy Services Ltd. Should we read much into the fact that Infosys is not the first off the blocks this time?
For one, Infosys will be the second Sensex company after HDFC to report its quarterly results when it publishes them on 15 July. The company typically publishes its earnings on the second Friday of the reporting month. However if that month starts on a weekend, the firm declares results on the third Friday.
Second, investors and brokerages might not expecting much in terms of an earnings surprise from Infy because of global economic uncertainty and restructuring in that firm. Yes, the Infy stock has trailed TCS in the run-up to the results, but the scrip has still gained 8% over the past couple of weeks, similar to the bencmark. The consensus estimate for revenues to increase is 4-5%.
Of course, the received wisdom is that companies with good results (or expectations of one) rush to announce their earnings while the others tarry. Now, that might be true for the larger universe of firms. But a look at the results of the Sensex firms over the past three quarters reveals no such trend. Very broadly speaking, the first 15 firms that report results have fewer profit declines than the next 15. That’s all.
Perhaps, HDFC’s finance department is better prepared this time. Or they might have a surprise in store tomorrow.