Stocks such Jindal Stainless, Godrej Agrovet, Welspun Corp, Jindal Steel & Power, ICICI Prudential Life Insurance, SBI Life Insurance, Orient Cement, SBI, APL Apollo Tubes and Finolex Industries among others have seen 10-100% upgrade in earnings estimates.
These stocks, according to Bloomberg consensus estimates, could return 10-30% over the next 12 months.
“December quarter is turning out to be the third quarter in a row to show more beats than misses indicating corporate profitability continues to be ahead of expectations which should lead to further upgrades,” said Vinod Karki, analyst, ICICI Securities.
BloombergCyclical sectors are driving the incremental earnings upgrades as the government boosts focus on fiscal expansion and capex spending, which augurs well for the much-awaited revival in the investment cycle.
“The December quarter earnings season has maintained the momentum of the September quarter results season – continued big beats and upgrades, and upbeat corporate commentaries have been reported across sectors and companies,” said Gautam Duggad, head of research, Motilal Oswal Financial Services. “We expect the earnings momentum to sustain with further revival in the economy, the number of Covid-19 cases being contained, and the benefit of a low base ahead.”
According to Amnish Aggarwal, head of research at Prabhudas Lilladher, “Rural India has done very well so far and I see no reason for it slowing down at least in the immediate term. It is very clear that the discretionary segments are coming back.”
