Brace for 'weak' Indian Q1 earnings, says BofA-ML

BRACE-FOR-WEAK-INDIAN-Q1-EARNINGS-BOFA-ML:Brace for 'weak' Indian Q1 earnings, says BofA-ML

 

Reuters Market Eye - Indian corporate earnings results for Jan-March "should be weak," warns Bank of America-Merrill Lynch, sees potential for a market correction.

BofA-ML estimates headline profit growth for fiscal Q1 "is likely" to be to 13.7 percent, but 9.7 percent if excluding State Bank of India .

The investment bank says estimates sales growth of 16.7 percent across its coverage universe, calls it the lowest sales growth in the last 10 quarters.

BofA-ML says SBI, ICICI Bank , HDFC Bank , Infosys and Tata Motors are expected to be the key contributors of growth.

However, Reliance Industries , Tata Steel , Hindalco Industries to drag down growth, BoA-ML forecasts.

Drilling down into specific forecasts, BoA-ML expects results buys to be ICICI Bank, HCL Tech , Apollo Tyres , and Jaiprakash Hydro Power .

However, among disappointments BoA-ML sees Reliance Industries , IDEA , and Larsen & Toubro .

(rafael.nam@thomsonreuters.com)