March quarter results season bids adieu: 5 key lessons
Another quarter has gone by with no significant recovery coming for the corporates. The March quarter exhibited a mixed picture with consumption and commodity oriented sectors recording a healthy performance, but corporate Banks and capital Goods remaining a drag. Now investors hope the much-awaited earnings recovery will finally take place in FY19.
Here are 5 key trends of Q4FY18 compiled by brokerage Motilal Oswal Securities:
Good pick-up in consumption, especially rural, with improved commentaries on rural consumption trends from corporates in Auto, FMCG and Durables.
A sharp deterioration in profitability of PSU Banks led by higher slippages and provisions, exacerbated by the recent RBI guidelines on NPA dispensations. The value migration in favor of private banks continues unabated.
Lackluster performance of capex-driven sectors.
Cyclicals continue leading from the front, with Metals and Oil&Gas outperforming expectations.
After a strong outperformance by the IT sector over the past six months, we have downgraded the ratings of four companies in our IT universe this quarter.