Q1FY2007 earnings preview: Sharekhan Special dated July 07, 2006

[Sunil]

 

Sharekhan Special [July 07, 2006] Please see the attachment for details Share khan www.sharekhan.com

Summary of Contents SHAREKHAN SPECIAL Q1FY2007 earnings preview Key points The domestic demand driven story is likely to continue with the growth in the Sensex earnings led by the automobile, cement, capital goods and fast moving consumer goods (FMCG) companies. We expect the pharmaceuticals sector to report a strong growth on the back of the latest acquisitions done by the companies (Dr Reddy's acquired Betapharm) and new product approvals.  We also expect the information technology sector companies to report a strong earnings growth on the back of a robust volume growth and the depreciation of the rupee vis-à-vis the dollar. We expect the earnings of the Sensex companies to grow by a strong 19.1% year on year (yoy) led by a strong growth in the above-mentioned sectors. For FY2007 the earnings of the Sensex companies are expected to grow at 21.0% and excluding Oil and Natural Gas Corporation the growth is likely to be 22.6%. The earnings growth for the banking sector for Q1FY2007 is likely to be much lower than the full year growth as a major portion of the mark-to-market losses on the bond portfolios will be booked in Q1FY2007.

Regards, The Sharekhan Research Team myac...@sharekhan.com