The June quarter disappointed the Street amid weak demand, slow private sector capital expenditure, liquidity crunch, and global trade issues. Of the Nifty 50 companies, eight have reported better-than-expected results, 11 have reported in-line results, 15 reported a mixed set of numbers while 16 firms reported below-estimate earnings, as per a report by Centrum Broking.

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The profitability of India Inc in the June quarter grew at 6.6 percent as against a 24.6 percent growth seen in the corresponding quarter of last year signalling a clear slowdown, CARE Ratings said in a report.

Elara Securities has downgraded Nifty50 EPS for FY20 to 582 (4.3 percent) and FY21 to 701 (4.2 percent) from the previous quarter, on the back of weakness in sectors such as auto, energy and IT.

Among Nifty 50 stocks, Bharti Airtel, Ultratech Cement, and Indusind bank saw an upward FY20 earnings revisions while Yes Bank, Tata Motors, Tata Steel and Maruti saw the steepest downward revisions.

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Among BSE-100 stocks, 28 stocks saw consistent downward FY20 earnings revision in the last four quarters. They include Exide, Eicher Motors, Mahindra & Mahindra and Lupin.

For Q1, Exide Industries reported a 7 percent on-year increase in standalone net profit to Rs 224.29 crore. The demand of automotive batteries remained under pressure, while growth in UPS, telecom and other infrastructure segments continued, Exide MD said post-earnings.

Britannia's Q1 results were disappointing with growth being much lower than peers. To add to that, the management’s commentary on demand outlook was also discouraging.

For FY21, Bharat Forge, Britannia, Cipla, Hero MotoCorp, MRF, and Vedanta were some of the stock that saw EPS downgrades. However, stocks like ACC, Nestle India, Wipro, Dr Reddy's, Bajaj Finance, saw FY21 EPS upgrades in 3 of the last 4 quarters.

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Going ahead, analysts expect banking and financials to drive earnings and the credit growth is expected to pick up in the second half of the current financial year.

"High valuations amidst high earnings downgrade risks to keep us cautious on the market. We have a defensive stance in our model portfolio with FMCG, private banks and telecom being our key overweights,” said Edelweiss in a recent report.

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First Published:Aug 23, 2019 1:39 PM IST