Missing the mark: India lags peers on earnings show in June quarter

As against brokerages' estimates of a 12% growth, Nifty earnings growth has been a tepid 5%

Foreign institutional investors (FIIs) have one more reason to curb their flows into India and look at other markets within the Asian basket. Within the Asian markets, India has delivered one of the worse corporate earnings scorecards in the June quarter. 

Data sourced and collated by Reuters showed that 61 per cent of Indian companies had missed consensus earnings estimates in the June quarter. This was only slightly better than South Korea, where 63 per cent of companies missed estimates. According to market participants, the weak earnings performance by India Inc can further push away FII flows chasing the Asian markets. 

Among the BSE-100 firms that have reported their earnings, 40 per cent have missed estimates and only 23 per cent have managed to beat the earnings estimates. For the balance 37, the earnings have been largely in-line with what was expected by analysts. Even the companies constituting the benchmark Nifty have failed to deliver. 

As against brokerages' estimates of a 12 per cent growth, Nifty earnings growth has been a tepid 5 per cent. With the domestic economy also expected to see a slowdown, the intensity of earning downgrades has picked up post-June quarter.

Source: Bloomberg, Note: the analysis considers only firms for which earnings & consensus estimates are available