MUMBAI, October 8, 2009 (AFP) – Indian firms are expected to report a fall in profits in the quarterly results season that kicks off Friday, but better times lie ahead as the country’s economic recovery takes hold, analysts forecast. “The economic fundamentals are improving,” Hitesh Agrawal, head of research at Mumbai’s Angel Broking, said Wednesday.
For the three months to September, the 30 companies which make up Mumbai’s benchmark Sensex index could report up to a 12 percent drop in net profit year-on-year, analysts say.
But on a quarter-on-quarter basis, profits are expected to rise, reflecting a recovery that is slowly gathering steam in Asia’s third-largest economy.
“Sequentially over previous quarters, we see better earnings,” Bharat Iyer, India strategist with JP Morgan, told AFP.
India’s economy grew by 6.1 percent in the three months to June, picking up pace from the previous quarter when it expanded by 5.8 percent and signalling the country’s emergence from the global downturn.
“This will be the last quarter of year-on-year decline in earnings for the universe that we track,” said Navin Agarwal, chief executive officer of Institutional Equities at Motilal Oswal.
“We expect about a 1