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RBS says that earnings for its India universe,which does not include capital goods and power utility companies,will grow at a muted pace of 5 percent in September quarter on an annual basis.
House expects net margins to decline by 1.35 percentage points on a yearly basis,partially offsetting the 15 percent growth in net sales that they foresee.
Our analysts expect net margin compression across most sectors in India except in cement and mining companies. We expect cement companies to post better net margins on an annual basis (up 272 bps) due to better pricing in south India which should drive a 78 percent on year increase in net income.
As in the June quarter,our analysts expect private-sector banks’ earnings (up 22 percent on year) to significantly outpace those of their public sector peers (up 3 percent),added the bank.
The bank believes that investors need to watch earnings reports for September ending quarter closely to see if full year consensus earnings expectations of 12 percent for FY12 will be met.
