This year, the combined net profit of 24 index companies, which have declared their June-20 numbers, has declined by 37 per cent year on year, while their revenues, including other income, is down by 21 per cent YoY so far.
The combined profit before tax of 748 companies, which have declared their results for Q1FY21, is down 46 per cent YoY. Their net sales went down by a quarter as the Covid-19 lockdown led to a sharp fall in economic activity.
In the past four months, $7.5 billion has flowed back into domestic stocks, helping the benchmark indices bounce back more than 40 per cent from their 2020 lows.
The current valuation is 38 per cent higher than the 10-year average of 22x and over 50 per cent higher than the 20-year average of around 20x.
Many weekly indicators turn positive as economy prepares for Unlock 3.0.
The V-shaped rebound has been aided by a gush of liquidity flooding the global financial system, thanks to balance sheet expansion.
Mumbai traffic, mobile internet speeds, and grocery and pharmacy visits are all showing lower numbers for the latest week.
In three of the past four years, 10-year returns have been 10 per cent or lower, making equity unattractive, compared to other asset classes.
The combined weight of IT companies in the benchmark Nifty 50 index is now at a five-year high of 15 per cent as these companies continue to outperform the broader market.
Equity investors should thank cash-rich biggies such as TCS, ITC, HUL, Nestl, and Bajaj Auto for this.
Together, the top 10 business groups reported a pre-tax loss of Rs 19,342 crore during the January-March 2020 quarter, as against a profit before tax of around Rs 48,500 crore in the year-ago period and Rs 39,600 crore during the December quarter. While Vedanta was the worst hit. others included Aditya Birla, Bharti, Adani, Mahindra, and Tata.
Though India was under lockdown for only seven days of the quarter, global demand and commodity prices began falling from February as COVID-19 was spreading in other countries. 1,002 listed companies - excluding banks, non-bank lenders, insurers, brokerages, and IT firms - reported a combined pre-tax loss of around Rs 2,700 crore during Q4.
In the last five years, imports from HK have more than tripled -- from $5.6 billion in FY15 to $17.1 billion in FY20. In the same period, exports declined by 20 per cent -- from $13.6 billion in FY15 to $10.8 billion (annualised) in FY20.
What worked for the markets was favourable global investor sentiment and encouraging flows into the emerging markets following stimulus measures taken by central banks.
The first spending item on the chopping block is capital expenditure, followed by operating costs and overheads, including sales and marketing expenses.
Market experts said disruptions caused by the pandemic - to businesses as well as the filing process - and the sharp decline in valuations were the reasons behind fewer new companies wanting to tap the capital markets.
While freight traffic has gone up, the Google location data shows more people are stepping out of their homes.
The trend in corporate earnings suggests that index earnings could fall to the levels last seen in early 2014.
Combined profit before tax of 81 firms down 37.5% y-o-y, worst show in at least 3 years.
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