Indian firms’ earnings seen weak but better times ahead

Sri Lankan President Maithripala Sirisena (L) and Sri Lankan Prime Minister Ranil Wickremasinghe gesture as Sri Lankan Finance Minister Ravi Karunanayake (unseen) presents a supplementary budget to parliament, marking the first economic policy statement of the new government which came to power earlier in the month in Colombo on January 29, 2015. Sri Lanka's new government announced hefty taxes on top companies in a bid to raise revenue, accusing the previous regime of fudging the figures and leaving the economy in a "sad state". AFP PHOTO / Ishara S. KODIKARA (Photo credit should read Ishara S.KODIKARA/AFP/Getty Images)

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