【Mumbai】The March quarter earnings season is again expected to be driven by export-oriented companies, given that the rupee depreciated for most part of the period. Although a tougher domestic macro-environment would continue to weigh on the profitability of corporate India, export-driven sectors are seen providing some respite to the aggregate financial performance of India Inc.
“... trend of past few quarters is expected to persist. Export-oriented sectors (IT, pharma) are expected to register robust set of numbers, while domestic economy-linked sectors — investment related (cement, construction, capital goods) and consumption related (staples and autos) — are expected to post sluggish numbers,” said Edelweiss Securities in a preview report.
○Fall in prices of raw material, stronger rupee and increased gas supply can help revive fertiliser sector
【HYDERABAD】After several years in the doldrums, the Indian fertiliser sector could see turnaround in the next few months because of favourable factors such as an easing of raw material prices globally, a more stable rupee and increased gas supplies, industry leaders and experts said.
Over the last few years, the industry has been struggling with high raw material prices, currency fluctuation, falling fuel supplies and subsidy delays, leading to inventory pileups and pressure on finances of producers.
○Surging oil marketing companies may stumble on subsidy woes
【New Delhi】The recent run-up in the stock price of oil marketing companies (OMCs) such as Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd has stretched the trio's valuations, which appear unsustainable.
Assumptions over a swift reduction in subsidies may not come true while there is an uncertainty over who will shoulder the burden of selling products below cost of close to Rs 5,000 crore in FY14 over and above the share of governments and exploration companies. The petroleum industry's total under-recoveries, or losses on account of selling fuels below market price, in FY14 are projected to be Rs 1,41,000 crore.
Going by the subsidy sharing trend in the first nine months of FY14, Rs 65,000 crore is likely to be borne by upstream companies. The Union Budget shows the government has limited its burden at Rs 71,000 crore for FY14. This leaves a hole of nearly Rs 5,000 crore in under-recoveries with the growing prospect that OMC will end up bearing it.
【News source】
Boosted by weak Re, export-oriented companies to drive Q4FY14 earnings
Fall in prices of raw material, stronger rupee and increased gas supply can help revive fertiliser sector
Surging oil marketing companies may stumble on subsidy woes
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