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| According to them, fundamentals are in place for the growth story to continue. GDP growth has been led by a 7.40 per cent growth in the manufacturing sector. Meanwhile, a 16.90 per cent growth in agriculture pointers to the good prospects of old economy sectors. |
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| The recent history of corporate financial performances is also significant. The y-o-y rate of growth of net profits has been rising for the first three quarters, helped by the lower interest outgo and taxation. |
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| But here's a caveat: Improving performances mean higher base, making it difficult for companies to match projected growth rates and heightened expectations. Will India Inc be able to match these expectations? Here's a look at the expectations for key sectors and companies in Q4FY04. |
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| Pharma: According to analysts, results are going to be mixed during the quarter. While MNCs and mid-caps should do well, local bigwigs, Dr Reddy's and Ranbaxy, are expected to post flat results due to lack of progress in terms of new product launches. |
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| Shahina Mukadam, senior research analyst at HDFC Securities, is of the opinion that Ranbaxy's growth story could taper off following the good year the company had in 2003. "Dr Reddy's results will be in line with Q3, which is not good news. It had no new launches in US and Europe. It is also expected to be impacted negatively after losing the case over the launch of the generic version of Pfizer's anti-hypertension drug." |
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| According to a report by domestic securities firm, Motilal Oswal, Dr Reddy's is likely to report sales of Rs 490 crore, up 13.40 per cent, and a net profit of Rs 69.57 crore, an increase of 21 for the quarter. The slump in revenue growth witnessed by Ranbaxy in the earlier quarters is expected to slow down sales growth at 6.20 per cent to Rs 118 crore. |
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| Mid-cap companies as well as MNCs are likely to be better off, with GlaxoSmithKline expected to benefit from the Burroughs Wellcome merger which will reflect on its profitability. |
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| Cement: A revival in cement prices should lead to robust earnings growth in the March quarter, say analysts. However, they are worried about overcapacity in the short-term. Cement prices in the last quarter were about 10 per cent higher than last year, which is likely to boost profits. However, rural demand has slowed down. |
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| That apart, the outlook on the sector continues to be bullish, with the government's thrust on infrastructure and the overall economic growth expected to boost demand. Demand is expected to pick up post-monsoons, leading to a further rise in prices. |
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According to Motilal Oswal
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