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Earnings growth for Q3 likely to be weak: Edelweiss
In the backdrop of a perceptible slowdown in macro-environment, India Inc faces another tough quarter as Q3FY12 results estimates point to a tepid 3.3% PAT growth for Sensex companies.
In the backdrop of a perceptible slowdown in macro-environment, India Inc faces another tough quarter as Q3FY12 results estimates point to a tepid 3.3% PAT growth for Sensex companies.
Drawdown in revenue trajectory also continues with top line growth moderating to 19% as margins remain under pressure and EBITDA margins likely to contract by 221 bps, Edelweiss Securities said in its report here.
However, the stand out sector could be pharma, led by a strong surge in the domestic market, favourable currency movement and niche launches in the US, the report said.
Among major sectors, IT, consumer goods, pharma and cement are expected to post a healthy top line growth while growth for metals, construction and real estate could be relatively lower.
Within the Sensex, top line growth is expected to be healthy for the IT pack, Mahindra & Mahindra (M&M), Tata Power while Maruti Suzuki (MSIL) , DLF and non ferrous pack (Hindalco, Sterlite) are expected to post negative or relatively slower growth rates.
The sensex is expected to clock an earnings growth of 3.3% YoY, way below 12.1% in Q2FY12. Apart from this weary outlook, equally disconcerting is the breadth of negative earnings revision as almost a third of companies may post an earnings decline of more than 20%.
