Active Stocks
Tue Mar 19 2024 13:21:10
  1. Tata Consultancy Services share price
  2. 4,013.45 -3.17%
  1. Tata Steel share price
  2. 149.80 0.13%
  1. Bharti Airtel share price
  2. 1,232.00 0.57%
  1. Power Grid Corporation Of India share price
  2. 259.75 -1.98%
  1. ITC share price
  2. 409.65 -1.86%
Business News/ Market / Mark-to-market/  Company earnings estimates continue to be cut after September quarter results
BackBack

Company earnings estimates continue to be cut after September quarter results

Despite the recent ratings upgrade by Moody's and bank recapitalization, the threat of further cut in Nifty earnings estimates still looms

Apart from hardening commodity prices, risks to Nifty earnings growth also emerge from the lumpy slippages in the financial sector. Graphic: Subrata Jana/MintPremium
Apart from hardening commodity prices, risks to Nifty earnings growth also emerge from the lumpy slippages in the financial sector. Graphic: Subrata Jana/Mint

Corporate earnings for the September quarter were largely a mixed bag. Among key sectors, consumer-focused companies were aided by restocking post goods and services tax (GST) roll out and an early festival season, but index heavy-weight banks lagged, impacted by higher-than-expected provisioning.

Though many corporates are optimistic a revival in rural consumption and the abating of the impact of GST transition, confidence about a significant earnings revival is missing, analysts said.

As the accompanying chart shows, Bloomberg’s Nifty fiscal year consensus earnings per share (EPS) estimates have declined from where they were before the September quarter earnings season began.

“Indices have been rallying and valuations remain expensive despite the fact that fundamentally, things continue to be on a shaky ground. Ample and continuous liquidity pouring into the market especially via NFOs (new fund offers.) is driving the hope trade. The decline that one is seeing in Nifty earnings estimates signals the lack of confidence with respect to significant earnings revival. Going ahead, a key dampener for India Inc earnings is likely to come from rising oil prices," cautioned Sanjiv Bhasin, executive vice president (markets and corporate affairs) at India Infoline Ltd.

Apart from hardening commodity prices, risks to Nifty earnings growth also emerge from the lumpy slippages in the financial sector.

In short, despite the recent ratings upgrade by Moody’s and bank recapitalization, the threat of further cut in Nifty earnings estimates still looms.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 22 Nov 2017, 07:29 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App