Taking stock of earnings reported by India Inc in the quarter gone by, research firm Motilal Oswal says that it was a ‘breath of fresh air,’ as most of the corporates have beaten street estimates.
Taking stock of earnings reported by India Inc in the quarter gone by, research firm Motilal Oswal says that it was a ‘breath of fresh air,’ as most of the corporates have beaten street estimates. In an interview to CNBC TV18, Gautam Duggad of Motilal Oswal Securities said, “The earnings have come as breath of fresh air and one can look forward to better earnings due to base effect and disruptions behind us.” Gautam Duggad, Head of Research-Institutional Equities at Motial Oswal, pointed out that in the firm’s universe, upgrade to downgrade ratio has improved from 0.46 to 0.84 and the surprise to miss ratio is at a sixteen quarter high at 1.3. “Out of the 17 sectors that we track, almost 14 have reported EBITDA which is either in-line or ahead of estimates,” he told the channel.
According to him, one of the key takeaways from the second quarter earnings was the bounce back in consumption, and more importantly a pick up in rural demand. “The ingredients for rural consumption are all in place. The possibility of consumption surprising on the upside in H2FY18 is far higher,” he said adding that the firm is betting on the consumption space.
Many analysts have pointed out of late that the second quarter earnings have been better than anticipated. In an interview to CNBC TV18, Saurabh Mukherjea said that Q2FY18 has been a solid earnings season, however, the year may not see any double digit earnings growth. While dissecting the earnings in Q2, Krishna Kumar Karwa, Managing Director at Emkay Global Securities said recently, “ There have been target price upgrades on at least 50 companies out of 100, which is much more than what was happening in last quarter or few quarters ago. Even on the EPS upgrades, in 40-45 companies have seen them in FY-18 and FY-19. My sense is that the numbers have been better than expected.”
In this quarter itself, while the quarterly numbers are either in line or better than expectations, the first half taken as a whole hasn’t seen growth. “If you look at the first half numbers in totality (in the first half), there hasn’t been growth in the EBITDA level so far. So hopefully we will see some growth in the next half as we go forward,” Sanjeev Prasad Co-Head and Managing Director, Kotak Institutional Equities said in an interview to CNBC TV18.