Fading Modi magic? Brokerages cut earnings estimates as hopes of early recovery subside

Analysts at brokerages who upgraded their earnings estimates in a hurry last year soon after the NDA government came to power have been forced to trim their rosy forecasts. With hopes of an early recovery waning, earnings estimates have been cut in the last few months as analysts do not expect a revival for at least a couple of quarters. The cut in profit forecasts has been across the board but these downgrades have been steeper for companies such as Jindal Steel, Sunteck Realty, Info Edge, United Spirits and India Cements. In these companies, earnings estimates have been downgraded by 30-70% in the past one month. Such a scenario has increased the possibility of further correction in many of these stocks, or a prolonged lull.