Nifty50’s earnings cup: Key highlights for September quarter

Revenue growth is also likely to remain in double digits, albeit slower, given the high base effect of the previous year's June quarter. In addition, benign input costs will continue to support operating profitability.

Since a year, there has been a noticeable drop in rural volume due to inflation and erratic monsoons. While the demand in cities is leading the overall growth with urban incomes more resilient, companies expect rural volume to recover on the back on a decent monsoon, which generally translates into higher sales after a quarter lag.

A Bloomberg earnings upgrade or downgrade is the consensus estimate by equity analysts tracking the stock, indicating expectations of higher or lower profits, respectively.

That expected growth would easily outpace most other economies, many of which have slowed dramatically following a historic series of central bank interest rate rises to tame inflation. The Reserve Bank of India's efforts have been mild by comparison

From the valuation parameter, the price to earnings ratio has gone from 24 to 19 times. In price to book, we are below the 10-year average. If you look at the earnings yield, it is roughly about 5.6%. If you look at market cap GDP, we are at 94%. The peak was about 112%. In the last 18 months, the total economic growth, the GDP growth is 20%. For Nifty, it is minus 9%.

On account of usual seasonality, Indian IT services firms are projected to report moderated growth in the quarter ended March 2023.

On the last trading day of this week, 84 companies listed on the BSE will announce their December quarter earnings. Among the Nifty companies, SBI Life Insurance Company and JSW Steel will report their Q3 earnings. Street will also keeping a close track on the earnings of ACC, Adani Power, AU Small Finance Bank, Cyient, Equitas Small Finance Bank, Hindustan Petroleum Corporation (HPCL), Indian Energy Exchange.

With prices of raw materials softening, a range of user companies are expected to post better operating margins than they did in the December 2022 quarter.

In Q1 2023, nearly half of the companies in the Nifty 200 index posted profit growth, despite a smaller number achieving a growth rate of over 25% than in the previous quarter. Russia's invasion of Ukraine and rising commodity prices, along with increasing interest rates and inflation, hit earnings through most of the first three quarters of FY23. However, commodity prices began to ease toward the end of the year, with many companies reporting solid sequential and year-on-year performance. Q2 2024 is expected to be less successful than FY23 due to macroeconomic headwinds impacting the tech sector