What To Expect From India Inc In FY15’s Q3 Results

When a new political system emerged at the Centre in 2014, it instilled hope in the hearts of millions of Indians and promised revival of the Indian economy.

While Indian economy reported below-5% growth in FY13 and FY14, analysts and pundits speculated FY15 would be better. But were they any close? Dipen Shah, head-Private Client Group Research, Kotak Securities takes a dig at what we can expect from the India Inc during this quarter that ended on December 31, 2014

He said, “We expect stocks under our coverage [ex-banking / non-banking financial companies (NBFCs)] to report revenue growth of about 3.7% on a YoY basis. Among sectors, IT, Cement, Logistics and Auto are expected to predominantly propel this growth.”

Some of the infrastructure and investment-heavy sectors like power and capital goods are expected to limit the development owing to the lower investment activity in infrastructure, fuel linkage issues and weak demand, he added.

On the other hand, owing to continuous drop in crude prices, revenues of oil and gas sector are expected to witness a fall. As a result of this, revenues of Cairn India and other refineries will be impacted.

Looking at the banking and financial sector, net interest income is expected to surge by 13.0% YoY for banks and NBFCs. Private banks are likely to grow at 20.1% YoY while PSU banks are expected to report a moderate growth of 9.3% YoY.

The Kotak security top official also added on back of lower interest reversal owing to stable asset quality along with comfortable liquidity conditions, the net interest margin (NIM) is likely to remain stable quarter-on-quarter (QoQ).

Even since Modi-led government has come to power, it has come up with various reform-based initiatives to strengthen investors’ confidence in to the Indian economy. But even then, stock market has been witnessing choppy trades owing to numerous global concerns; foreign flows have also been negative in December 2014. However, many industry experts believe that the policymakers have been taking the right step in order to bring a boost in the Indian economy. Our fingers are crossed!