Tide is turning for corporate earnings: Morgan Stanley

Morgan Stanley says the revenue growth for energy companies was healthy in the September quarter, while telecom companies disappointed on most financial metrics

Corporate earnings have failed to meet expectations quarter after quarter. And the latest one (September quarter) is no different. However, foreign brokerage Morgan Stanley believes the trend could reverse this quarter onwards.

“Some market participants may be anchored to the decade gone by, remaining skeptical about the earnings growth recovery. We believe the cycle is turning as corporate India has come out of the balance sheet and earnings recession. We expect an earning CAGR (compounded annual growth rate) at 20 per cent in the next two years,” said analysts Sheela Rathi and Ridham Desai.

For the June-September quarter, the combined net profit