See downside risk to FY16 earnings growth assumption: CLSA

Mahesh Nandurkar, CLSA said earnings growth in Q4FY15 for their coverage universe was negative 13.6 percent and the worst since June 2012.

“Domestic companies performed a tad better, with earnings expansion of 0.1 percent; still a 6-quarter low. With this, FY15 Sensex earnings growth has slipped into the negative territory; a 6-year low,” he explained.

According to him, disconnect between GDP growth numbers and corporate performance is widening. EBITDA margins was the bright spot, rising more than 100 basis points Y-o-Y despite revenue deceleration, he feels.

He said few positive surprises were Maruti Suzuki, Bajaj Auto, ACC, oil-marketing firms, Idea Cellular and Dish TV. "We see further downside risk to the 19 percent earnings growth assumption for FY16," he said.