Equity investors should support for more downgrades in the September 2018 quarterly earnings season, which kicks off this week. Most analysts expect a sharp slowdown in profits and top-line growth for the country’s top listed companies, thanks to increasing input costs and a fallen depreciation in the rupee during the second quarter of the current financial year.

The combined net profit of the Nifty 50 companies excluding energy and financial firms is estimated to inch up by 2.9 %  year-on-year (YoY) against 11.2 %  growth during the April-June 2018 quarter. Top line growth is expected to small down to 10.1% YoY during the second quarter, the lowest in the last six quarters.

Index companies as a whole are likely to do a tad better due to advantages of higher crude oil and gas companies. The combined net profit of Nifty 50 companies(including an energy and financials)is expected to grow by 5.2% during the second quarter, but down from 5.9% growth in the first quarter and 6.2% growth a year ago.

Index companies combined net sales are likely to grow by 25.5 % YoY, led by oil companies, which are likely to report 49% YoY jump in their top line during the quarter.

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