For the December-2018-ended-quarter, the earnings per share (EPS) from Nifty 50 companies hit an 11-quarter low of Rs 96.5 per share. This is the first time that its earnings have fallen below the Rs 100/share level since June 2016 and the fourth consecutive quarter where the results have been lower than estimated.
The expected EPS for the third quarter (Q3) of the financial year 2018-19 was at Rs 118.3/share and this was revised to Rs 119.2 by the time the first Nifty 50 company reported its December quarter earnings on 9 January. Later by the end of the earnings season, it was lowered by analysts to Rs 118.7/share. The earnings estimates for the FY19 is now lowered by 5.5 percent to Rs 552.9 a share.
While most brokers said that the Q3 results of companies were mostly better or in line with their expectations, there were some big disappointments like that from Tata Motors that reported a massive loss of Rs 26,961 crore. There were also slight deviations results than expectations from heavyweight players in the 50-stock index that had to weigh on the EPS. Additionally, while lower passenger vehicle sales affected metal stocks and automakers, higher provisions hurt banks.
Estimates for the FY19 are now upgraded only for the Communications and Industrials sector.