Indian corporate earnings may see some recovery this financial year but most of it is likely to take place in the latter half of 2019-20, after a disappointing March quarter, according to Suhas Harinarayanan of JM Financial Institutional Securities.
The recovery this year would be led by banks, metals and the oil & gas sector, Harinarayanan, head of institutional equity research at the brokerage, told BloombergQuint in an interview.
The March quarter earnings were among the worst in more than a year in terms of the number of companies that beat or missed estimates, according to JM Financial's analysis of more than 155 stocks. Profit numbers and margins were also disappointing for most firms, he said, adding that the only positive was the “handsome” revenue performance.
Here are the key highlights from the conversation:
- Expect earnings of corporate facing banks to rebound in current and next financial year.
- Positively surprised by the margin beat by consumer companies.
- Electrical consumer durable companies reported good earnings.
- Bullish on non-banking financial companies and private financials.
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