Q3 earnings springs surprise on stock mkts

However,beating market expectations could not be an easy task going forward given that the recent jump in inflation which indeed paced up since the December 2010 quarter may have trimmed either the volume or margin growths for Corporate India.

According to market participants however,the result hitherto remains a mixed bag and does not point towards any drastic effect of rising inflation on the businesses.

While certain domestic issues,namely mounting inflation and subsequent higher interest rate expectations have harnessed Indian equity market in last two months,these issues are to an extent priced into the share prices,” said Piyush Garg,CIO,ICICI Securities. He added the trend in Q3 results so far does not signal any dramatic change in earnings outlook for near to medium term unless India experiences a notable downgrade in GDP and witnesses more than expected rise in interest rates.

So far,while certain prominent companies like TCS,Bhel and Axis bank have more than managed to meet the market expectations,companies like RIL and ITC met with market expectations while Infosys,Wipro and L&T showed a subdued performance.

From the group of 50 companies whose actual quarterly earnings were compared to broader market estimates,about two third companies posted a surprise positive earnings while about 18 companies failed to meet the earning estimates for the quarter.

On the whole,almost half of the companies from the sample set of 50 showed a positive or a negative difference in earnings in the range of 0-10%,while 17 companies beat the market expectations by 20-50%.