1. Risks to earnings have increased post-Brexit

Risks to earnings have increased post-Brexit

In India, Brexit will have a negative impact on sectors such as information technology (IT), metals, automobiles, pharma, textiles, and gems and jewellery.

By: | Published: June 28, 2016 6:19 AM

In India, Brexit will have a negative impact on sectors such as information technology (IT), metals, automobiles, pharma, textiles, and gems and jewellery. For IT services, the Europe (including the UK) accounts for 29% of total exports and the UK alone accounts for 17% of overall exports.

The economic uncertainty in the EU and the consequent impact on discretionary spends would hurt domestic software companies and the immediate impact will be through the currency route. For the markets, valuations are still on the higher side and risks to earnings have increased post Brexit. There could be earnings cut in automobiles, IT and metals sectors due to Brexit and related weaker global economic growth.

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