Nifty revenue

appears muted and macro indicators suggest a sequential stabilisation in growth momentum.

“The demand environment seems to have normalised further, post demonetisation drag seen in December quarter last year. Domestic liquidity and the interest rate environment have turned growth supportive. The base effect for year-on-year earnings growth comparisons is likely to stay adverse for another quarter, which increases the risk to existing YoY consensus earnings forecasts of 22% for FY18,” it said.

According to ICICI Securities Ltd, June-quarter earnings and possibly the next quarter is likely to be a non-event as the economy gears up for GST challenge. It said that GST uncertainty headwinds, which is largely a one-off event, could be seen even during Q2FY17 and doesn’t change the structural story of strong domestic consumption led growth and is expected to be a key long-term driver of the economy and earnings growth.

Morgan Stanley expects de-stocking and price discounts ahead of GST rollout, lagged impact of higher commodity prices leading to higher costs, inventory losses due to lower oil prices for state-run oil companies and revenue weakness for technology due to rupee appreciation to impact quarterly earnings.

Edelweiss Securities Ltd said that management commentary post the quarterly earnings is likely to remain muted due to GST and lingering effects of demonetisation but there could be some optimism in housing finance, cement and auto firms.. “While we do expect rest of the year to be better, likely subdued Q1 show will weigh on our 20% earnings growth forecast for FY18. Our FY17, FY18, FY19 Nifty earnings per share (EPS) forecasts are ₹450, ₹540 and ₹640, respectively,” it said in a July 5 report. It added earnings downgrades are likely given that full year EPS growth estimates still imply 18-20% growth in FY18.