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25
April 2017
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S.B.I (The Total Investment & Insurance
Solutions)
The
yearly State Bank of India (SBI) Composite Index, an indicator for tracking
India’s manufacturing activity, has slipped below 50 in April 2017 of 49.3 (low
decline), compared to last month’s revised index of 50.3 (low growth). The Total Investment & Insurance Solutions
 |
S.B.I 1 (The Total Investment & Insurance
Solutions)
According
to the researchers at SBI, the Index of Industrial Production (IIP) may be in
the positive territory in April 2017, mainly due to base effect.
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S.B.I (The Total Investment & Insurance
Solutions)
"Even
as Index numbers are showing gradual traction, the corporate results outlook
for fourth quarter of FY2017 is expected to exhibit improvement in topline and
bottomline, unlike in the recent past, where improvement in bottomline was
positive while topline growth was either tepid or negative. We expect topline
growth ranging from 10-12% while bottomline may surpass topline growth,"
SBI says in a report. The Total Investment
& Insurance Solutions
According
to the report, performance is expected to be varying for different sectors with
FMCG expected to do better. It says, "Banks are expected to do better on
net earnings levels but with low credit off take, the year is going to be a
challenge on the margin front. The credit growth has been anaemic and was at
4.36% for the fortnight ended 24 March 2017, the lowest in many years. With
banks flushed with funds, we expect to see the spreads coming under pressure.
With further tightening of stressed assets provisions as per new norms from
Reserve Bank of India (RB) we see the post proviso profit numbers a challenge.
Automobile, Capital Goods, Metals, Oil and Gas are expected to declare
double-digit revenue growth. In terms of profit after tax we may see sectors
such as pharma, metals, capital goods come out with double digit growth."
Some
of the best performers from the results announced so far include Hindustan Zinc
(topline growth) as can be seen from the alongside table. Goa Carbon was the
best performer in the bottomline. HDFC Bank, Yes Bank and IndusInd Bank also
exhibited better performance. Overall, the report says, some of the well
governed corporates have weathered the demonetisation storm. These companies
have been the first to declare the results while some of them may yet assess
the impact of demonetization.
"With
the capacity utilization of the Indian industry still hovering in the
seventies, we believe with Government push for Infrastructure, Housing etc. and
better capacity utilization, Corporate earnings may set for better numbers in
FY18," the report from SBI concluded.The
Total Investment & Insurance Solutions
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