Earnings Season Kicks Off Next Week; Here’s What You Should Bet On

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The earning season will kick-off with the results of Infosys on April 15. Expectations do not run high this time as well, when it comes to the earnings season.

Earnings  Season Kicks Off Next Week; Here’s What You Should Bet On
However, there will be some pockets that would perform well. There is a high possibility that Infosys would deliver this quarter as well. The company may once again beat analysts' estimates and one would wait to see the dollar revenue guidance.

Also, the pipeline and the management commentary would be important. Infosys shares have rallied ever since the company posted robust Q3 numbers. Therefore, the scope for disappointment is very limited.

Interestingly, most software services companies may do well, given that not even one company has sounded a profit or a revenue warning as in the past when HCL Tech and TCS had sounded warnings. So, you might want to bet on select IT stocks.

The banking sector again is a highly predictable sector when it comes to quarterly numbers. IndusInd Bank, HDFC Bank, Yes Bank and Kotak Bank are expected to do well, while ICICI Bank, State Bank, PNB and Bank of Baroda may continue to disappoint.

It would be interesting to see, how Axis Bank does this quarter, given that it had a bad last quarter, when non performing assets rose. NPAs, would once again be closely watched by the market.

Pharma companies are likely to be a mixed bag and it is always difficult to predict the results here.

Infrastructure and capital goods companies are likely to have a bad quarter with BHEL and Larsen and Toubro continuing to perform badly. However, there are some greenshoots that are emerging, as can be seen from the recent order inflows from BHEL. Investors will also watch the order flow of Larsen and Toubro, to see if there is any improvement and economic growth is gaining traction.

All in all, it is going to be quarter of bad performance once again, especially from the banking sector. Any upbeat performance, may lead to a quick recovery in the stock markets. Bets would remain on quality private banking stocks as also select IT stocks.


Read more about: hcl tech, tcs, infosys
Story first published: Saturday, April 9, 2016, 9:11 [IST]
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