We expect a good strong earnings season ahead: Ajay Bagga

economictimes.indiatimes.com:

There is going to be the IT pack declaring earnings for Q1 FY24. How are you looking at earnings? Will it beat estimates, the consensus estimates? And will it also be followed by some upgrades, downgrades? How are you looking at it? Overall, it is a strong earnings season. The decliners will be metals and cement.

They will see a year-on-year very sharp earning corrections. Metals, especially more than a 50% fall from the first quarter last year. But we are expecting really strong numbers from auto.

Auto will have an order of magnitude upwards, many times better numbers. You will have nearly a 40% jump in the financial side, mostly for the private sector banks and the consumer-facing NBFCs, the housing finance NBFCs you will have very good numbers there. Chemicals will disappoint again and the stocks have been reflecting that.

It is a broad spectrum but we are expecting softish numbers. And IT and pharma, we see year-on-year growth but the management commentary might be soft, especially in IT. Given the global macro backdrop, we are expecting the orders to have slowed down and the hikes taken to retain employees over the last one year, those have reduced the margins.

So, topish or flattish margins and not very good order flows, weak guidance is what we are expecting on IT, even though the rupee numbers will look good year-on-year. Overall, we are expecting a good earnings season for the Nifty and broader market. The real estate companies obviously will do very well.

Capital goods, industrials should do well. And the electronic manufacturing which has taken a lot of interest over the last two weeks, we have seen a lot of brokerages now coming out with EMS-based reports. I think there again the valuations have run up as