You are here: Home » PTI Stories » National » News
Business Standard

Demonetisation to further drag Nifty earnings in FY17: UBS

Press Trust of India  |  Mumbai 

As of high-value notes expected to disrupt business activity, earnings from are likely to take a hit and estimated to grow in the range of 0-9 per cent this fiscal, depending on the pace of economic recovery, UBS Securities today said.

"We have been expecting earnings cuts and is a further drag near-term. It makes 2017-18/2018-19 outlook more uncertain," the financial services major said in a note.



According to UBS, in the case where disruption from only lasts a month causing insignificant impact on economy, the earnings could grow at 9 per cent.

In a 'slower recovery' scenario which implies 6 months of disruption and the likely at 6 per cent for 2017-18 could result in earnings growth at 5 per cent.

Besides, UBS has estimated that earnings growth can be zero per cent if there is a significantly lower level of activity within the informal economy (business failures, layoffs) with associated impact even on the formal economy.

In this scenario, real growth may be very weak at 3.2 per cent for the current fiscal but may recover to 8.5 per cent in 2017-18, the report said.

The global investment bank had earlier estimated earnings to grow at 10 per cent in the current fiscal.

According to UBS, while the would disrupt economic activity in the near term, it would also formalise the economy.

However, the report said uncertainty prevailed in terms of -- whether the impact prolongs beyond 3-6 months; on the nature scale and timing of policy response if any as well as impact from GST implementation and other follow-up anti-graft measures.

"Our investor discussions suggest that they expect the impact to be short-lived and many view it as a big long-term positive," it added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

RECOMMENDED FOR YOU

Demonetisation to further drag Nifty earnings in FY17: UBS

As demonetisation of high-value notes expected to disrupt business activity, earnings from Nifty are likely to take a hit and estimated to grow in the range of 0-9 per cent this fiscal, depending on the pace of economic recovery, UBS Securities India today said. "We have been expecting earnings cuts and demonetisation is a further drag near-term. It makes 2017-18/2018-19 outlook more uncertain," the financial services major said in a note. According to UBS, in the case where disruption from demonetisation only lasts a month causing insignificant impact on economy, the Nifty earnings could grow at 9 per cent. In a 'slower recovery' scenario which implies 6 months of disruption and the GDP likely at 6 per cent for 2017-18 could result in earnings growth at 5 per cent. Besides, UBS has estimated that Nifty earnings growth can be zero per cent if there is a significantly lower level of activity within the informal economy (business failures, layoffs) with associated impact even on the ... As of high-value notes expected to disrupt business activity, earnings from are likely to take a hit and estimated to grow in the range of 0-9 per cent this fiscal, depending on the pace of economic recovery, UBS Securities today said.

"We have been expecting earnings cuts and is a further drag near-term. It makes 2017-18/2018-19 outlook more uncertain," the financial services major said in a note.

According to UBS, in the case where disruption from only lasts a month causing insignificant impact on economy, the earnings could grow at 9 per cent.

In a 'slower recovery' scenario which implies 6 months of disruption and the likely at 6 per cent for 2017-18 could result in earnings growth at 5 per cent.

Besides, UBS has estimated that earnings growth can be zero per cent if there is a significantly lower level of activity within the informal economy (business failures, layoffs) with associated impact even on the formal economy.

In this scenario, real growth may be very weak at 3.2 per cent for the current fiscal but may recover to 8.5 per cent in 2017-18, the report said.

The global investment bank had earlier estimated earnings to grow at 10 per cent in the current fiscal.

According to UBS, while the would disrupt economic activity in the near term, it would also formalise the economy.

However, the report said uncertainty prevailed in terms of -- whether the impact prolongs beyond 3-6 months; on the nature scale and timing of policy response if any as well as impact from GST implementation and other follow-up anti-graft measures.

"Our investor discussions suggest that they expect the impact to be short-lived and many view it as a big long-term positive," it added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Demonetisation to further drag Nifty earnings in FY17: UBS

As of high-value notes expected to disrupt business activity, earnings from are likely to take a hit and estimated to grow in the range of 0-9 per cent this fiscal, depending on the pace of economic recovery, UBS Securities today said.

"We have been expecting earnings cuts and is a further drag near-term. It makes 2017-18/2018-19 outlook more uncertain," the financial services major said in a note.

According to UBS, in the case where disruption from only lasts a month causing insignificant impact on economy, the earnings could grow at 9 per cent.

In a 'slower recovery' scenario which implies 6 months of disruption and the likely at 6 per cent for 2017-18 could result in earnings growth at 5 per cent.

Besides, UBS has estimated that earnings growth can be zero per cent if there is a significantly lower level of activity within the informal economy (business failures, layoffs) with associated impact even on the formal economy.

In this scenario, real growth may be very weak at 3.2 per cent for the current fiscal but may recover to 8.5 per cent in 2017-18, the report said.

The global investment bank had earlier estimated earnings to grow at 10 per cent in the current fiscal.

According to UBS, while the would disrupt economic activity in the near term, it would also formalise the economy.

However, the report said uncertainty prevailed in terms of -- whether the impact prolongs beyond 3-6 months; on the nature scale and timing of policy response if any as well as impact from GST implementation and other follow-up anti-graft measures.

"Our investor discussions suggest that they expect the impact to be short-lived and many view it as a big long-term positive," it added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard