Expectations from results are not very high: Kotak Securities

The result season has just begun. Infosys and TCS are declaring their financial performance for the first quarter of current fiscal on Wednesday. Among Sensex constituents, HDFC and HDFC Bank are also declaring their results this week.

While analysts’ views are diverse on the performance of Sensex companies, most of them, however, agree on one thing.

They expect a slow down in profit growth.

“Expectations from the results are not very high, in our view, which may act as a cushion for the markets. We opine that, if the markets have to sustain the current levels and move up, it will need to have more confidence in the medium- to long-term growth rates of corporate India,” said a note from Kotak Securities.

Edelweiss Securities expects slowdown in macro-environment likely to result in another sub-10 per cent earnings growth for the Sensex universe as well as their coverage universe (ex-OMCs).

“However, we expect EBITDA margins to improve sequentially, as in a slowing demand scenario, businesses adjust by shifting focus from growth to profitability through cost rationalisation,” it added.

(This article was published on July 10, 2012)
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