The country's 30-blue chip firms may witness as much as 10 per cent decline in their first quarter profits in the current fiscal, primarily due to subdued earnings from real estate and metal sectors, analysts believe.
"We expect Sensex PAT to de-grow by 9.7 per cent Year-on Year (YoY) in Q1FY10-– the third straight quarter of decline. Sensex sales is likely to fall by four per cent," domestic brokerage firm Religare said in a report.
However, earnings are likely to be relatively better due to a favourable swing in currency movement during the quarter and extraordinary items.
"The Sensex earnings (excluding-oil companies) are estimated to drop by 4.9 per cent YoY, implying a better performance compared with the 8.8 per cent decline seen in Q4 FY2009," another brokerage firm Sharekhan said in a report.
"The first quarter figures are not expected to be good as there were concerns of election results and budget. Now that everything is in place we can expect better earnings figures in the second half of FY10," Religare Capital Markets President Equity Amitabh Chakraborty said.
Global research firm Macquarie said recovery in the economy is still in its early stages and that it may be too early for a significant pass through to corporate earnings. "However, the foundation for the recovery has been set," it added.