By Express News Service
BHUBANESWAR: The earnings season will kick off this week with IT blue-chip Tata Consultancy Services releasing its first quarter (Q1) numbers on July 10. The market will take cues from the results to figure out the future direction of corporate earnings, though expectations are modest this time.It would be the third consecutive quarter of double-digit growth. Most brokerages expect a 20-22 per cent growth in earnings per share of the Nifty 50 companies in the three months ended June. Kotak and CRISIL are relatively conservative with a 12 per cent and 13 per cent growth forecast, respectively.
Among consumption-driven sectors, automobiles, retail and airline services are expected to grow in the mid-to-high teens for the fourth consecutive quarter, said CRISIL in a report. This will be driven by improving macros, a pick-up in consumer sentiment, and growing rural demand, besides government support to farmers and expectations of a third year of normal monsoon. Inflation, though rising, is not going off the handle, aiding consumer sentiment.
Moreover, this quarter will reaffirm a sustained pick-up in demand in most consumption-linked sectors. Natural gas and cement are expected to post robust growth, led by volumes, while the likes of petrochemicals and steel products would benefit from price surge. “The performance would be in line with our estimate of double-digit growth for FY19, with 15 of the 21 key sectors expected to log growth above 10 per cent this time,” said Prasad Koparkar, senior director, CRISIL Research.
The falling Rupee has helped exporters as well. IT companies are poised to post better growth rates in FY19. “TCS revenues are expected to get a boost in the medium term from the ramp-up of large, platform-centric and digital deals won in the recent past and shift in enterprise IT spends back toward the core of the business,” said ICICI Securities.
