- The domestic demand-driven story is likely to continue considering that the growth in the earnings of the Sensex is expected to have been led by companies from the automobile, cement, capital goods and fast moving consumer goods (FMCG) sectors in Q4FY2006.
- Pharmaceutical companies are also expected to show arobust growth for this quarter, since for these companies the growth in the same quarter last year was affectedby value-added tax (VAT) related issues.
- For the fourth quarter, the earnings growth rate of theSensex companies is likely to be 14.0% year on year(yoy), slightly lower than the growth rate of 14.3% inQ3FY2006.
- The lower growth can be attributed primarilyto the expectations of a flat growth in the bottom lineof Reliance Industries Ltd (RIL).
The FY2006 earnings of the Sensex companies areexpected to grow at 21.5%. Excluding the oil companies(RIL and Oil and Natural Gas Corporation) the growth islikely to be 22.6% for the quarter.
I will, in the subsequent posts, discuss performance of each sector.
