As the fourth quarter result season kicks off amid a Global Economic Recession let us focus on the 30 Sensex companies to sense what is there in store for us.
For the first time since 1998, when India Inc started declaring quarterly results, most of the sensex companies are poised to post a decline in sales as well as net profits in the fourth quarter.As many as 16 Sensex companies are expected to record a fall in their net profits in the fourth quarter, compared to 14 in the third quarter.The worst is likely to come from sector leaders like Ranbaxy and TATA STEEl.Ranbaxy likely to suffer MTM losses.Tata Steel expected to post a consolidated netloss of over 900 crores(This includes CORUS).
Among others, DLF, Grasim, Hindalco, ICICI Bank, Maruti Suzuki, Mahindra & Mahindra (M&M), Sterlite Industries and Tata Motors could see a significant decline in net profits, while the fall in net for Reliance Industries (RIL), Reliance Communications (RCom) and Wipro could be modest.
The Sensex companies had reported an 11 per cent drop in their net profits despite a single-digit revenue growth in the third quarter. However, in the first two quarters, these companies had recorded a significant growth in their revenues and had also reported growth in net profits.
Most corporate analysts expect ACC, Bharti Airtel, Bharat Heavy Electricals (BHEL), HDFC Bank, Hindustan Unilever, Infosys Technologies, NTPC, ONGC and Tata Power to show a strong net profit growth of over 20 per cent in the fourth quarter.A growth in net sales is expected to come from ACC, Bharti Airtel, Bhel, HDFC Bank, Infosys Technologies, Jaiprakash Associates, Larsen & Toubro (L&T), Maruti Suzuki, Reliance Infra, TCS and Wipro. These firms are likely to show a strong 20 per cent-plus growth.
But DLF, Hindalco, ICICI Bank, M&M, RIL, Sterlite Industries and Tata Motors are likely to show decline in sales.
Conclusion: Morethan half of them are going to report a decline in Net Profit.
Offload stocks like ICICI BANK,M&M ,STERLITE INDUSTRIES,TATA MOTORS,RANBAXY,TATA STEEL.,DLF,Grasim,Maruti Suzuki and Hindalco from your portfolio.
And you can hold stocks like ACC, Bharti Airtel, Bharat Heavy Electricals (BHEL), HDFC Bank, Hindustan Unilever, Infosys Technologies, NTPC, ONGC and Tata Power.Interstingly REliance infra is expected to show a growth in Net sales.
Trade cautiously.Trade with strict Stop Loss.
