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Upcoming earning season may remain weak: Brokerages
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SME Times News Bureau | 09 Oct, 2019
The earning preview for the September quarter, which begins Thursday,
remains bleak with most companies having already paid their advance tax
and thus unable to reap the benefits of the corporate tax reduction
announced last month.
"We are not assuming any benefits from the
corporate tax reduction in 2QFY20 as many companies would have paid
advance tax," brokerage firm Motilal Oswal said in its result preview.
Predicting
weak earnings, the firm said, the operating environment in 2QFY20 was
"perhaps the most sombre since the June '17 quarter (1QFY18), which had
witnessed massive down-stocking ahead of the GST implementation from
July '17."
Motilal Oswal said it expected "tepid operating
performance" by FMCG companies like Britannia, Colgate, Dabur, Emami,
GSK Consumer and Nestle. FMCG sales are often used to predict the health
of the rural economy.
Centrum brokerage in its earning preview
said, "We expect companies under coverage to register revenue, EBITDA
and Profit after tax (PAT) growth of 7 per cent, 15.7 per cent and 17.1
per cent in Q2FY20E, lower than in the previous quarter."
Kotak
estimated that profit before tax (PBT) would decline 4.6 per cent YoY in
Q2FY20 led by a YoY decline in PBT in sectors like auto, metals &
mining, oil & gas and telecom; while Edelweiss saw a revenue or
profit decline of 3 per cent or 6 per cent.
The GDP growth rate
of the economy has slipped to 5 per cent in the first quarter of FY20,
the lowest in over six years. In a bid to revive growth, the Modi
government last month announced a sharp tax rate cut for domestic
companies from 30 per cent to 22 per cent.
Delivering another
rate cut last week, the Reserve Bank of India said the GDP growth slump
in the first quarter has been followed by generally weaker high
frequency indicators for the second quarter.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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