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Banks to Brighten India company earnings Amid IT Uncertainties

July 11, 2023

Banks to Brighten India company earnings Amid IT Uncertainties
Banks and consumer companies are expected to drive first-quarter earnings in India boosted by accelerating economic activity, easing input costs and decade-low bad loans at lenders, while the outlook for the nation’s software exporters is clouded by global headwinds.  

India’s banks have largely remained insulated from a global crisis in the industry with their heavy reliance on local markets. Meanwhile, the nation’s consumer and capital goods companies are expected to benefit from commodity prices that have come off peaks seen after Russia’s invasion of Ukraine. 
 
“Across industries, we’re seeing costs coming off sharply, so that will reflect in earnings,” said Varun Saboo, Mumbai-based head of equities at Anand Rathi Share and Stock Brokers Ltd. Saboo estimates earnings growth in the ballpark of 15% for the companies in the benchmark NSE Nifty 50 index. Asia’s top software services exporter Tata Consultancy Services Ltd. will kick off on Wednesday the first-quarter earnings season for Indian companies.

Conglomerate Reliance Industries Ltd., which has a 10th of the weightage in the Nifty 50 index, would see its operating profit rising in the June quarter, on back of strong performance in its oil-to-chemicals and digital services segments, according to analyst estimates compiled by Bloomberg. 
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