Companies downgrade earnings estimates after poor results
Mumbai: Revenue estimates for the current financial year have been cut, with most companies reporting disappointing results for the September quarter.
A private brokerage firm has cut earnings estimates for 49 per cent of the 147 companies it monitors for the current financial year. A report by the firm also said that the earnings per share of Nifty companies has been cut by 3.70 per cent for the current financial year.
However, there has been no change in the earnings estimates for FY24.
Another brokerage house said that the net profit of the companies included in the Nifty-50 index is seeing an increase of 11 per cent in the current financial year and 16 per cent in the next financial year.
The modest growth in FY23 indicates a sharp decline in profits in the commodities sector, with BPCL incurring huge losses. However, a strong growth in profits in the auto and banking sectors may moderate this fall, the brokerage house said in a report.
The weak second quarter results are reflected in the cut in our profit estimates for fiscals 2023 and 2024, the report said.
There is a downside risk to earnings in cyclical sectors such as auto and construction. There are also downside risks to export-oriented sectors such as IT services. Inflation and higher interest rates are likely to result in a reduction in consumption demand.