This quarter holds pleasant surprises

This quarter holds pleasant surprises

The rebound in company earnings that started in the June quarter of fiscal 2010 likely continued in the three months ended September, though the upside may not have been very sharp and evenly spread across sectors. Automobile, capital goods and cement firms are expected to gain the most because of lower input costs and government focus on construction. Metal, and oil and gas companies are forecast to be the laggards in the second quarter because of price vagaries.

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Still, the earnings outlook is uniformly positive for all sectors barring a few, including telecom, as economic recovery gathers momentum. Industrial output gained 10.4% in August, the most in 22 months; the rate of decline in exports is easing; and economists are once again considering upward growth revisions. Riding on these factors, brokerages are likely to upgrade earnings per share, or EPS, for fiscal 2011.

Also See Earnings preview (Graphic 1)

Earnings preview (Graphic 2)

Two of the three Nifty firms that have already reported earnings for the second quarter have exceeded expectations. And more surprises could be in store.

Edited excerpts from reports of different brokerages on 13 critical sectors:

Compiled by Ashwin Ramarathinam

Graphics by Ahmed Raza Khan / Mint