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Our Bureau

Mumbai, Jan. 5 Profits of several corporates are expected to be lower in the December quarter, according to a study by Motilal Oswal Financial Services (MOSL).

According to the quarterly preview of 128 companies by MOSL (excluding oil marketing companies), it is expected that the profit will decline by 8.4 per cent on year on year basis in the third quarter of 2008-09.

It is also expected that these companies will deliver a sales growth of 10.9 per cent year on year and EBIDTA decline of 1.8 per cent during the same period for the third quarter of 2008-09.

For the same period, it is expected that Sensex companies will deliver a decline in profits by six per cent, according to the report.

SBI is expected to be the biggest contributor to earnings growth of Sensex in the third quarter of the financial year 2008-09, according to the report.

The country’s largest bank will contribute close to 34 per cent of the Sensex earnings growth, followed by Bharti Airtel at 29 per cent and Infosys at 17 per cent, according to the quarterly preview report.

Among the stocks expected to make the highest negative contributions to Sensex earnings growth for the quarter ending December of financial year 2009 are Tata Steel (-96 per cent), DLF (-42 per cent), Reliance Industries (-27 per cent), Tata Motors (-22 per cent) and Maruti Suzuki (-14 per cent).

Though there are many drivers to the earnings downgrade, the biggest contributor has been a sharp fall in the commodity prices, said Mr Rajat Rajgarhia, Director-Research, Motilal Oswal.

The December quarter is expected to be the worst quarter, he said.

Banks, IT and engineering will be the top three sectors, while metals, auto and real estate will report the steepest decline, said Mr Rajgarhia.

The report also mentions that private insurance companies were the biggest investors in Indian equities, with investments of close to Rs 70,810 crore (according to dollar rupee rate on Monday) in 2008.

Domestic inflows will drive equities in 2009, added Mr Rajgarhia.

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