Bloomberg
Published Jul 08, 2019 23:16
Updated Jul 09, 2019 01:40
Multiple Economic Headwinds Cloud Profit Outlook for Indian Companies
(Bloomberg) -- A slowdown in economic growth amid the trade dispute between the world’s biggest economies has put Indian corporate earnings at risk, analysts say.
“It’s the confluence of headwinds -- weak global demand, fading impact of rupee depreciation, non-bank finance company crisis and scale-back of government spending -- which is deepening the slowdown,” Edelweiss Securities Ltd. analysts led by Prateek Parekh said in a note.
The country’s economic growth slumped to a five-year low of 5.8% in January-March. The absence of any substantial fiscal stimulus for companies in the federal budget last week puts the onus back on the government to spur growth. The Reserve Bank of India has already cut interest rates three times this year and signaled more easing to come.
Edelweiss expects profits for companies in the NSE Nifty 50 Index rose 7% year-on-year in the April-June period. The broker sees profit expansion concentrated in just a few sectors, namely financials, airlines, pharmaceuticals and cement.
Here’s what analysts expect from the results season that kicks off Tuesday with Asia’s top software exporter, Tata Consultancy Services Ltd.
Reliance Securities (Naveen Kulkarni)
Dolat Capital
Edelweiss Securities (Prateek Parekh)
Kotak Institutional Equities (Sanjeev Prasad)
Written By: Bloomberg
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