Market analysts expect a strong set of revenue numbers from automobile makers — apparently with Tata Motors having improved its Nano sales in December vastly, so are others armed with impressive sale numbers to boast of.
Alongside, oil & gas producers, metal manufacturers are also expected to produce good results. However, dampners are to be expected from the telecom, cement and power sectors with dismal figures, they say.
To start with, Angel Broking maintains that the 30 Sensex companies are likely to report a 19 per cent year-on-year growth in their sales and a 26 per cent rise in net profits for the third quarter, while Motilal Oswal feels that their sales will rise 17 per cent and the profit after tax growth will be 23 per cent.
Prabhudas Lilladher, on the other hand, feels that revenue for the Nifty companies (excluding oil and gas) will jump 22 per cent and net profit by 14 per cent, though margins may fall.
At the same time, analysts concede that the stock markets, which showed an 18 per cent growth in calendar 2010, have been weighed down by concerns over spiralling inflation, tight liquidity crunch, the prospect of rising interest rate, and a recent surge in commodity prices. Such challenges are bound to impact the performance of several sectors, especially those relying on the domestic markets.
Despite the hiccups, the scorecard for the December-quarter may not be dotted by huge disappointments as companies are expected to show a healthy growth in turnover and profits though there are some concerns over margin-pressure due to the rise in commodity prices.
For instance, auto firms are expected to show some decent growth, but their margins may come under pressure, even after the price hike effected by all leading vehicle makers. However, PINC Research feels the sectoral performance is likely to be a mixed bag with Ashok Leyland witnessing a profit de-growth and Maruti Suzuki posting lower net profits because of higher royalty charges and raw material costs.
A similar view envisages for the banking industry which has been grappling with challenges like tight liquidity and deposit growth while not keeping pace with advances.
The popular perception is that banks with higher ratio of current accounts and savings accounts will fare better.
The rise in commodity prices may not be good news for some, but analysts expect that the oil & gas sector will benefit from firm crude oil prices in the quarter. Especially oil-PSUs like ONGC is likely to report good performance in Q3 this fiscal. Metal companies are also projected to fare well with higher volumes and prices.