Kharif crop and improving rural demand is set to revive, Motilal Oswal said in a report.
«After a flat 1HFY25, as the government spending revives in 2HFY25, this should augur well for corporate earnings along with a good kharif crop and improving rural demand,» the report added.
The corporate earnings in the second quarter witnessed a subdued picture, particularly weighed down by the commodities sector.
Excluding this segment, however, earnings were broadly in line with expectations. The consumption sector witnessed a challenge and emerged as a major weak spot. The BFSI (Banking, Financial Services, and Insurance) space in the second quarter witnessed asset-quality stress.
The report points out that the level of government spending has been a critical factor that impacted corporate earnings of the companies.
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