How will the Covid-19 pandemic impact Nifty companies' earnings in Q4FY20?

Margins in some sectors could improve due to soft raw material prices.

In Q4FY19 Nifty sales/EBITDA/PAT grew nearly 10 per cent/6 per cent/16 per cent year-on-year (YoY), respectively. Hence, the base as far as earnings before interest, taxes, depreciation, and amortisation (EBITDA) and profit after tax (PAT) is concerned, is high in Q4FY20. However in Q4FY19, profitability was driven largely by banks. Excluding banks, the PAT growth was slow at <2 per cent. The topline growth for Nifty companies in Q4FY19 was the slowest since Q3FY17.

COVID 19 would impact the performance of Nifty companies and overall corporate sector in Q4FY20 and Q1FY21. In Q4FY20, we could see a decline in both