Second Covid Wave To Impact Q1 FY 2022 Earnings

Management commentaries from the on-going 4QFY21 earnings season clearly indicate that demand would moderate, especially post the second half of April, Motilal Oswal Institutional Equities has said in a report. According to the brokerage firm the impact is expected to continue in May'21.

"It would clearly impact earnings in 1QFY22 and impair the visibility of FY22 earnings, in our view. Our research team has thus far in this earnings season cut estimates for more companies than the upgrades given for FY22. That said, the market is looking beyond this near-term weakness and has been resilient despite the severity of the second wave. We continue to recommend the addition of select cyclicals and remain OW on BFSI, IT, Cement, and Metals. We maintain a NEUTRAL stance on Consumer, Auto, Healthcare, and Capital Goods," the firm has noted.

According to Motilal Oswal it would clearly impact earnings in 1QFY22 and impair the visibility of FY22 earnings.

"Our research team has thus far in this earnings season cut estimates for more companies than the upgrades given for FY22. That said, the market is looking beyond this near-term weakness and has been resilient despite the severity of the second wave. We continue to recommend the addition of select cyclicals and remain OW on BFSI, IT, Cement, and Metals. We maintain a NEUTRAL stance on Consumer, Auto, Healthcare, and Capital Goods," the firm has noted.