Cyclical sectors to drive 3QFY21 earnings: Report

Mumbai, Jan 9 : The 3QFY21 earnings are expected to be led by cyclical sectors such as metals and cement, even as healthcare is expected to post another solid quarter, Motilal Oswal said in a report.
According to the report, the festive season has aided the demand recovery, and with vaccination against Covid-19 set to begin in the next few weeks in India, “we expect demand to sustain further”.
“The market closed CY20 with 15 per cent gains despite the economic turmoil caused by the Covid-19 pandemic. Corporate India’s strong focus on the balance sheet, cash flows, and cost controls helped tide over this difficult period (Mar-Sep’20) as listed large companies gained market share in an environment where unlisted and smaller players encountered multiple challenges,” the reports said.
Accordingly, the post-quarter updates or commentaries from key companies like HDFC Bank, HDFC, Bajaj Finance, Bandhan Bank, Titan, Marico, Godrej Consumer, Auto OEMs, etc. are indicative of strong underlying growth trends in 3QFY21.
The pick up in property registrations in key metro cities like Mumbai after a long time augurs well for broader macros as a sustained pick-up in real estate would have a multiplier effect on the economy, the report said.
“We expect the government to prioritise growth in the forthcoming Budget with a push towards fiscal spending and incentives for consumption,” the report said.