India Inc's earnings to shrink in Q2FY23; net sales growth slows

Equity valuations in India are among the highest globally on expectations of faster earnings growth

The July-September quarter (second quarter, or Q2) of 2022-23 (FY23) could mark the end of the period of unprecedented rise in India Inc’s earnings in the aftermath of the pandemic.

Most brokerages expect a contraction in corporate earnings and a moderation in revenue growth in Q2FY23 due to a combined effect of demand slowdown, decline in commodity prices, and margin contraction in sectors such as information technology services, fast-moving consumer goods, and cement.

According to various estimates by brokerages, India’s top 50 companies — that are part of the Nifty50 Index — are expected to report a collective net profit of Rs