India Inc.'s earnings blues may continue into third quarter

Overvaluation concerns and shifting global market sentiment likely to keep growth subdued

- Mayur Bhalerao

IT bellwether Tata Consultancy Services Ltd (TCS) began the third-quarter earnings season on a somber note with revenues sliding from lack of growth in the US and Europe. Other Indian companies, too, are bracing for another quarter of muted growth as the Q3 previews by leading brokerages suggest that the earnings slowdown seen in the first half of 2024-25 is far from over.

Analysts warn that overvaluation concerns and shifting global market sentiment will likely keep the momentum subdued across key sectors. Nifty 50 companies serve as a benchmark for assessing Indian corporations' performance, and forecasts for the October-December period indicate weak single-digit revenue and net profit growth.

Brokerage firms Motilal Oswal Financial Services Ltd and Mirae Asset Sharekhan expect revenue and net profit to grow a little less than 6% year-on-year (y-o-y).

Antique Stock Broking predicts even slower revenue growth of 4.8% y-o-y but slightly stronger profitability growth of 7.2%. Nuvama Research expects modest revenue growth of 5% but significantly lower profit growth of just 2% on-year.