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Corporate profit likely to come down by 8.4 percent in Q3
By siliconindia
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Tuesday, 06 January 2009, 19:18 IST
Mumbai: Many Indian corporate are likely to mark a decline in their profit during the December quarter. The profit of the corporate may witness a decline by 8.4 percent on year on year basis in the third quarter of 2008-09. During the period, the companies are expected to deliver a sales growth of 10.9 percent year on year and EBIDTA decline of 1.8 percent. The above findings are according to a report by Motilal Oswal Financial Services (MOSL).
The report also finds that the profits of the sensex companies are likely to decline by six percent in the same period. However, as per the report, State Bank of India (SBI) would be the biggest contributor to earnings growth of the Sensex in the third quarter of financial year 2008-09. SBI is expected to contribute close to 34 percent of the Sensex earnings growth. Bharti Airtel and Infosys will contribute 29 percent and 17 percent respectively.
On the other hand, Tata Steel by making a contribution of -96 percent would be the highest negative contributor to Sensex earning growth for the quarter ending December of financial year 2009. The other negative contributors would be DLF at -42 percent, Reliance at-27 percent, Tata Motors at -22 percent and Maruti Suzuki at -14 percent.
Rajat Rajgarhia, Director-Research, Motilal Oswal said, "Though there are many drivers to the earnings downgrade, the biggest contributor has been a sharp fall in the commodity prices." He mentioned that the December quarter would be the worst quarter. "Banks, IT and engineering will be the top three sectors, while metals, auto and real estate will report the steepest decline," he added.
Based on the MOSL estimation, the private insurance companies were the biggest investors in Indian equities, with investment of close to 
70, 810 crore in 2008.
70, 810 crore in 2008.