Motilal Oswal Financial Services Limited (MOFSL) expects Nifty earnings growth of 26 percent year on year (YoY), Gautam Duggad, head of research-institutional equities, told CNBC-TV18.

He said, “Growth at an aggregate level is looking good. The only problem is it’s a very narrow growth; about 3-4 sectors are contributing the entire 100 percent of the incremental profits.”

According to him, all the sectors will report year on year (YoY) decline in a margin except metals. “There is a going to be a broad-based margin contraction for the quarter across the board. In fact, if you exclude metals, almost all other sectors are going to report YoY margin contraction,” he said.

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Talking about sectors, he said that things are not looking good for the consumer durable goods space and two-wheeler space has seen deterioration in returns.

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He added that auto space has not witnessed earnings growth in the last 5 years. However, he continues to remain overweight on the IT sector.

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