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  • 4 things to expect from Q1 FY19 results

    Publish date: 13th July, 2018

    The quality of a company is measured on the basis of its performance over years (sometimes decades too). But that said quarterly results are important too especially for shareholders and analysts who closely monitor how a company performs from one quarter to another. The earnings season for FY19 has begun and expectations of a good performance by corporate India in the first quarter are high. Here are four things you should know.

  • Healthy revenue growth expected

    India Inc. is expected to deliver a quarterly revenue growth of 12.8% during the April-June quarter, according to a report by Crisil. This is the highest quarterly revenue growth in three years and the third consecutive quarter showing double digit growth. A revival in demand in the domestic and global markets has been a major factor for this increase in revenue.

  • Related: 4 macro-economic factors that can affect corporate profits in FY18-19

  • Sectors expected to perform well

    Positive revenue growth in the economy is reflected in many sectors. The auto sector is expected to report a strong Year-on-Year (Y-o-Y) earnings growth of 47%, as per Sector alert | Banks: Retail loan growth in top geara report by Kotak Institutional Equities. Other sectors that are poised for high earnings growth are: Metals (55%), Information Technology (51%) and Capital Goods (25%). Rise in consumption and a low base in the previous year seem to be key factors in this good performance. Export-oriented sectors like IT and pharmaceuticals could benefit from the depreciation of the rupee.

  • Related: Sector alert | Technology: In a different league

  • Sectors with weak earnings growth

    Not all sectors are poised for high growth during the first quarter of FY19. Kotak Institutional Equities expects weak earnings growth from sectors such as telecom, cement, airline services and sugar. The telecom sector continues to show signs of pricing pressure since the launch of Jio by Reliance. In the case of the cement sector, rise in crude oil prices could eat into profit margins. Read more about how rise in crude oil prices affects the Indian economy here. Similarly, airline services and sugar sectors are expected to be impacted by high commodity prices.

  • Factors that could constrain stock valuations

    A rise in bond yields and the huge uncertainty regarding the upcoming general elections in the summer of 2019 could have a huge impact on further valuation of stocks. If markets have to move upward from the current levels, corporate profit growth needs to improve significantly, according to a report by Kotak Institutional Equities.

    • June quarter results: 7 terms you will hear often   Read more

    • Five things to watch out for in Quarterly Results    Read here

  • -145.5%

    The telecom sector has been performing poorly over the past few quarters due to pricing pressures. This trend continues in Q1 of FY19 where the Earnings per Share (EPS) for this sector is likely to fall by 145.5%, according to a report by Livemint. In contrast, other sectors like IT, healthcare and capital goods are poised for high earnings growth.