India Inc's March Quarter Earnings Likely To Be Muted, Says Jefferies

India Inc. will likely report muted earning growth for January–March due to a decline in bank earnings growth, Jefferies said. It pegs earnings growth at 2% on an annualised basis.

Lending businesses' profitability will likely decline 8% year-on-year during the fourth quarter. Overall, the earnings trend of India Inc will likely remain muted, with earnings to see flat-to-low year-on-year growth in consumer, lending financials, cement, and chemicals sectors. IT earnings growth will decrease 3% sequentially and 6% on the year, Jefferies said.

Excluding financials, domestic companies will likely report Ebitda growth of 5% on the quarter and 12% on the year for the January–March period. Ebitda margin will rise 5% on the quarter, and will likely remain flat on the year. However, the operating profit will be at a five-quarter high. Margins in consumer staples and cement will rise 1% on the year for industrials, but will be flat in most others, the brokerage said.

On-year revenue growth of India Inc will be 12% and likely remain muted on quarter, according to the brokerage. Aggregate revenue for IT companies will continue to be subdued at 1.3% on the quarter and 7.2% on the year for the January–March period.

Oil marketing companies will see 50% year-on-year profit decline because of weak marketing and refining margins. Compressed natural gas will likely see year-on-year earnings decline of 15% or more on lower Administered Price Mechanism allocation, though situation improved sequentially, according to Jefferies.