FY18 starts with big earnings cut

Though estimates for FY18 have been slashed by 40%, analysts expect more downgrades in 3-6 months

Earnings’ downgrades have become a regular feature in Indian stock markets. However, the infection that caught India Inc about three years earlier is now manifesting into a disease.

If FY14-17 estimates were marked by a 10-27 per cent earnings’ downgrade, 2017-18 (starting April 1) begins with a 40 per cent downgrade in earnings estimates for Nifty companies. This is the highest in the past four years. The consensus in a Bloomberg poll, pegs Nifty companies’ earnings per share (EPS) at Rs 526.4 in FY18.

Two years earlier, the EPS forecast was Rs 739.7. When prospects began to look weak in