2QFY20 - Muted expectations
The latest results season has started on a somber note. Both the IT bell weather TCS and Infosys have highlighted the challenges persisting in the operating environment. Though the 2QFY20 saw divergent performance for both the leading companies, the guidance for near future underlined the growth challenges. The quarterly performance has to be evaluated with the backdrop of already muted expectations and earnings downgrades post 1QFY20 results. Some key points of 2QFY20 results forecast by brokerages could be summarized as follows: Expect profit before tax (PBT) for the KIE coverage universe to decline by 4.6% yoy in 2QFY20, led by a yoy decline in PBT in the following sectors: (1) automobiles (lower sales volumes and margin compression due to increase in discounts), (2) metals & mining (sluggish demand, weak realizations and volumes on a yoy basis), (3) oil, gas & consumable fuels (dragged by decline in volume growth for Coal India and lower net crude rea...