Wednesday, January 13, 2010

Result Preview : Earning momentum to accelerate

   
  Dear Kundapur Govardhana Kini,
  We understand the need for the right research to make the right investment decisions. To keep you well informed, we bring to you Result Preview.

 Earning momentum to accelerate...

 
 

Sustained recovery to continue 

We expect India Inc to continue their stellar performance in Q3FY10E after recording a healthy growth in the last quarter. Q3FY10E results are expected to improve significantly both QoQ and YoY. However, profitability growth is expected to remain subdued QoQ. There has been more evidence of a global economic recovery during the quarter. The market has also factored in all such positives by recouping most of the losses of the previous year. Sectors like metal, auto, healthcare and IT have outperformed both the Sensex as well as the Nifty by a huge margin in the past three months. However, we expect sector rotation to happen as some of best performing sectors like commodities and IT may find it difficult to deliver similar out performance after a stellar run. We prefer plays like pharma, FMCG, PSUs, banks, power, sugar, tea, hotels and media.

Hand some revenue growth

We expect the ICICIdirect.com universe (ex-banking and financial services) to post a healthy revenue growth of 17.3% YoY and 4.0% QoQ, aided by strong growth in automobiles, metals, sugar and oil and gas companies. On the other hand, pharma and pipe companies would contribute negatively to overall revenue growth. NII for banking and financial companies are expected to de-grow at 5.3% YoY and grow by 8.7% QoQ due to the full impact of repricing of deposit and other liability getting reflected in Q3FY10E.

 

 
 

Regards,

ICICIdirect.com

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