Joined: 07/Sep/2007
Location: India
Online Status: Offline
Posts: 45
Topic: Making sense out of the sensex earnings. Posted: 23/Sep/2007 at 4:31pm
Here is an article I had read somewhere....
Earnings of Sensex companies to grow by 20% yoy
The earnings of the Sensex' companies excluding oil companies and adjusted for one-time items are likely to grow by 20% year on year (yoy) and remain stable quarter on quarter in Q2FY2008.
In Q1FY2008 we had seen that around 10% of the reported earnings had come from foreign exchange (forex) gains. Keeping the current strong uptrend of the rupee in mind, we may see companies reporting another 3-5% of one-time forex gains during the quarter. This would be in contrast to the initial expectations of forex losses in Q2FY2008, as the rupee had started to decline when our markets were facing the threat of large-scale withdrawal from foreign institutional investors (FIIs). After the political turmoil and global subprime saga unfolded in end July and most part of August 2007 there were fears that the FIIs would pull out serious money from the market.
The Q2FY2008 earnings of the Sensex are going to be driven by companies from the telecom, information technology (IT) and banking sectors.
The backdrop of Q2FY2008 performance is not very encouraging with a lower export growth in rupee terms, a decline in the industrial output, deceleration in manufacturing revenues and a drop in automobile sales. All these leading indicators have been discussed in detail later.
Latest corporate tax collection growth rate for the period April to September 15, 2007 has slowed down to 25% from 49% reported for the period April to August 2007 (the first five months in FY2008). This translates into a 11% yoy growth in corporate tax collections for the first fortnight of September which includes the second installment of advance tax payments for corporates. We need to look at full tax collections for the month as the collections could have been influenced by the banking holiday falling on September 15, 2007 and the period of advance tax payment being extended to September 17, 2007.
Considering that all the leading indicators are pointing towards a slowdown, would the Reserve Bank of India (RBI) take cognisance of the matter and make the interest rate environment more conducive for growth? We feel the RBI is more likely to adopt a neutral stance in its next quarterly policy review meet (October end) before it starts easing its monetary stance. However the interest rates may start to come down slowly if the credit growth doesn't pick up and deposits continue to grow ahead of advances. This should set the stage for a recovery in key sectors like housing and automobiles with the onset of the festive season in the second half of the current fiscal.
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
Posted: 23/Sep/2007 at 7:48pm
I think Kotak is projecting 30 Sensex companies to deliver EPS of Rs. 1,000 in FY'09 & Rs. 850 in FY'08. It only gives an overall picture for sensex prediction game whereas some companies/sectors would out-perform while others might not.
Focussing on individual companies in one's portfolio would be better.
Life can only be understood backwards—but it must be lived forwards
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot delete your posts in this forum You cannot edit your posts in this forum You cannot create polls in this forum You cannot vote in polls in this forum
Here's why members would love to be a part of theequitydesk.com
Equity Desk focuses on why to buy shares and invest in share rather than what to buy.
Live discussion forum wherein members can discuss the current Indian share Market trend,
BSE Sensex or the Nifty Index.
Have huge cache of information on Indian and World Share Market.
Analysis of Indian stock market, Global events, Investing insights, portfolio
management strategies and thoughts,
Meet investors from round the globe check their investing strategies share experiences and learn
for their experiences on stocks and shares, evaluate opinions on investing in India.
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
IP Logged
