<p>Yes Bank on Friday said it expects the third quarter of the current financial year to remain subdued for companies but sees improvement in revenue in the March quarter on the back of government measures.</p>.<p>The muted demand environment amid economic slowdown weighed on corporate earnings during the second quarter of 2019-20 with an aggregate revenue recording a contraction of 3.5 per cent year-on-year compared to an expansion of 3 per cent in the preceding quarter of the financial year, Yes Bank said in a note on 'Corporate Earnings and Sectoral Outlook: Q2 FY20'.</p>.<p>"Going forward, we expect Q3 FY20 to remain subdued, however topline growth in Q4 (fourth quarter) FY20 could see some relative improvement as the economy is likely to gradually respond to measures rolled out by the government along with improved monetary policy transmission," the bank said.</p>.<p>The private sector lender said the benign commodity prices led companies to rein in expenses while helping them to protect their operating margins.</p>.<p>On the net profit front, transition to a new corporate tax regime shored up profit after tax (PAT) margins for majority of the companies under coverage, it added.</p>.<p>Management commentaries across sectors remained mixed with fast-moving consumer goods and automobile companies turning less sanguine about a recovery in H2 FY20 while infrastructure companies remained cautiously optimistic on account of government thrust on infrastructure and positive monsoon outturn driving rural demand for affordable housing, it said.</p>.<p>On the macroeconomic front, India's GDP growth dropped to a 26-quarter low of 4.5 per cent year-on-year in second quarter of 2019-20 from 5 per cent in first quarter of 2019-20, it added.</p>.<p>"With this anticipated downbeat print in Q2 and early signals from some high-frequency data released for the month of October, we have downgraded our FY20 GDP growth estimate to 5.2 per cent from 6 per cent earlier and vis-à-vis 6.8 per cent a year ago," Yes Bank said. </p>
<p>Yes Bank on Friday said it expects the third quarter of the current financial year to remain subdued for companies but sees improvement in revenue in the March quarter on the back of government measures.</p>.<p>The muted demand environment amid economic slowdown weighed on corporate earnings during the second quarter of 2019-20 with an aggregate revenue recording a contraction of 3.5 per cent year-on-year compared to an expansion of 3 per cent in the preceding quarter of the financial year, Yes Bank said in a note on 'Corporate Earnings and Sectoral Outlook: Q2 FY20'.</p>.<p>"Going forward, we expect Q3 FY20 to remain subdued, however topline growth in Q4 (fourth quarter) FY20 could see some relative improvement as the economy is likely to gradually respond to measures rolled out by the government along with improved monetary policy transmission," the bank said.</p>.<p>The private sector lender said the benign commodity prices led companies to rein in expenses while helping them to protect their operating margins.</p>.<p>On the net profit front, transition to a new corporate tax regime shored up profit after tax (PAT) margins for majority of the companies under coverage, it added.</p>.<p>Management commentaries across sectors remained mixed with fast-moving consumer goods and automobile companies turning less sanguine about a recovery in H2 FY20 while infrastructure companies remained cautiously optimistic on account of government thrust on infrastructure and positive monsoon outturn driving rural demand for affordable housing, it said.</p>.<p>On the macroeconomic front, India's GDP growth dropped to a 26-quarter low of 4.5 per cent year-on-year in second quarter of 2019-20 from 5 per cent in first quarter of 2019-20, it added.</p>.<p>"With this anticipated downbeat print in Q2 and early signals from some high-frequency data released for the month of October, we have downgraded our FY20 GDP growth estimate to 5.2 per cent from 6 per cent earlier and vis-à-vis 6.8 per cent a year ago," Yes Bank said. </p>