Analysts paint gloomy corporate earnings in 2009-10
Analysts said further slowdown in economy is likely to reflect on corporate profitability. Gainers: BSE ( A, B ) | NSE | Losers: BSE ( A, B ) | NSE | 52 Week: High, Low
By Nishanth Vasudevan, ET Bureau |
MUMBAI: After disappointing results in the December quarter, analysts at brokerages are painting a gloomy picture for corporate earnings in the coming quarters, probably till the end of fiscal 2009-10 (April-March).
Analysts said further slowdown in the economy, amid a global recession, is expected to increasingly reflect on corporate profitability and sales in the foreseeable period.
���We see further sales growth pressures ahead, on demand, and the now deflationary environment,��� Citigroup said in an earnings review note. The investment bank does not see earnings bounce back next year, as seen in 2002, after sales fell in 2001.
���India's nadir on earnings growth was -14% in 2001 (full year) ��� but the next year saw a 7% bounce-back. Currently, we are clearly not as optimistic ��� forecast -1% earnings growth in FY10 (2009-10),��� Citi said.
���Into the next year, we expect a lot of companies to de-grow.....and overall earnings growth concentration in a few companies should be very high,��� it added.
Echoing Citi's view on future earnings, Mumbai-based Edelweiss Securities expects earnings of Sensex companies to decline 3% in 2009-10, after a marginal growth of 5% in 2008-09, the current fiscal.
���Among large caps, FY10E earnings have been revised down by more than 20% in DLF, HPCL, ONGC, Cairn, MTNL, Hindalco, Nalco, Hindustan Zinc, ICICI Bank, and HDFC,��� the brokerage said.
Most analysts feel the negative impact of the economic slowdown will be much more severe on smaller companies in the next 4-5 quarters.
Analysts said further slowdown in the economy, amid a global recession, is expected to increasingly reflect on corporate profitability and sales in the foreseeable period.
���We see further sales growth pressures ahead, on demand, and the now deflationary environment,��� Citigroup said in an earnings review note. The investment bank does not see earnings bounce back next year, as seen in 2002, after sales fell in 2001.
���India's nadir on earnings growth was -14% in 2001 (full year) ��� but the next year saw a 7% bounce-back. Currently, we are clearly not as optimistic ��� forecast -1% earnings growth in FY10 (2009-10),��� Citi said.
���Into the next year, we expect a lot of companies to de-grow.....and overall earnings growth concentration in a few companies should be very high,��� it added.
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Echoing Citi's view on future earnings, Mumbai-based Edelweiss Securities expects earnings of Sensex companies to decline 3% in 2009-10, after a marginal growth of 5% in 2008-09, the current fiscal.
���Among large caps, FY10E earnings have been revised down by more than 20% in DLF, HPCL, ONGC, Cairn, MTNL, Hindalco, Nalco, Hindustan Zinc, ICICI Bank, and HDFC,��� the brokerage said.
Most analysts feel the negative impact of the economic slowdown will be much more severe on smaller companies in the next 4-5 quarters.
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