Expect Nifty's Q1FY18 earnings to decline 6%, revenue growth of 7%: Deutsche
Abhay Laijawala of Deutsche Bank said the research house expects Q1FY18 aggregate revenue growth of 7 percent, EBITDA decline of 7 percent and earnings decline of 6 percent (YoY) for the Nifty.
The 6 percent forecast decline in earnings may be exaggerated by the large YoY inventory adjustments at the oil marketing companies due to the sharp decline in global oil prices, according to him.
He feels excluding energy, Nifty earnings are expected to rise by 4 percent (YoY).
GST rollout uncertainties are forecast to impact earnings of companies focused on domestic consumption while exchange rate dynamics are likely to impact earnings of exporters, according to Laijawala.
For the Deutsche Bank coverage universe, analysts forecast revenue growth of 5 percent, EBITDA decline of 7 percent and earnings decline of 12 percent (YoY), he said.
Equity benchmarks opened moderately higher on Wednesday, with the Nifty holding 9600 level despite mixed Asian cues.
The 30-share BSE Sensex was up 25.37 points at 31,235.16 and the 50-share NSE Nifty rose 5.95 points to 9,619.25.
Reliance Industries hit a fresh 52-week high, up nearly a percent and surpassed market capitalisation of TCS. BPCL, M&M, Adani Ports and Tata Motors were other gainers.
HDFC lost a percent on exposure to NPA accounts Insolvency and Bankruptcy Code. Infosys, Maruti Suzuki, Tata Steel and Hindalco Industries were under pressure.
The broader markets gained too, with the Nifty Midcap up 0.3 percent as about two shares advanced for every share falling on the BSE.
Among midcaps, ABC Bearings surged 20 percent and Texmaco Rail was up 10 percent. Jubilant Life, Kesoram Industries, United Spirits, Persistent Systems, Shilpi Cable, Tata Coffee, Jaypee Infratech, Videocon and Venky's were up 1-5 percent.
Shiva Cement plunged 10 percent after 50 percent rally. Reliance Communications and Bajaj Finance were other losers.
Asian bourses were mixed as geopolitical concerns came to the fore a day after North Korea launched a long-range ballistic missile.
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