Analysts have great expectations from technology, banking and steel companies
Automobiles
The automobile sector had a good second quarter with sales improving for many companies. Even companies such as Tata Engineering and Mahindra & Mahindra (M&M) did well along with companies in the two-wheeler segment.
The third quarter is also expected to be good. Analysts expect Tata Engineering and M&M to continue to see overall growth in sales volumes and profits. With a 23 per cent rise in sales for third quarter, TVS Motors is expected to outshine others in terms of performance.
Hero Honda is not expected to do as well as its sales growth has slowed down. For the month of December 2002, its sales grew by a mere 1.05 per cent compared to 21 per cent for TVS and 10.6 per cent for Bajaj Auto.
Banking
The banking sector could see sustained rise in profits. The cut in the interest rates announced by the central bank should enable the banks to sustain treasury profits. Analysts say that the cut in deposit rates effected by several banks should help improve net interest margins.
Additionally, it is expected that the non-performing assets should increase by a lower amount this year. It is likely that the big banks could be the biggest gainers. Analysts predict a 20 per cent rise in earnings per share for HDFC Bank and the State Bank of India. ICICI Bank is expected to show slower 14 per cent growth in earnings per share.
Cement
Analysts do not expect an extraordinary performance from cement companies this quarter. "Compared to the second quarter of this fiscal, cement prices have improved and hence realisations should be better," says Sanjay Chabbria, IDBI Caps.
But on a year-on-year (YoY) basis, realisation could still be lower by about 7-8 per cent, say analysts. Gujarat Ambuja Cements may be the worst affected and analysts expect a drop in bottomline YoY. Net profit could be lower by 20 per cent. The other three companies, ACC, Larsen & Toubro (L&T) and Grasim, however, may see positive growth in net profits.
ACC
