Nearly 70 percent of large-cap stocks that form the benchmark Nifty 50 index have seen a cut in their earnings estimates for the current financial year. The measure of profitability for 34 Nifty companies was reduced by little over 9 percent since April, according to Bloomberg data.
Drugmakers were the worst hit as earning per share estimate for the five pharmaceutical companies on the Nifty was cut by 27.3 percent. The consensus EPS estimate downgrade is nearly 50 percent for the country's largest drugmaker Sun Pharmaceuticals Ltd.
Lupin Ltd., Dr. Reddy's Laboratories Ltd. and Sun Pharmaceuticals Ltd. are also the worst performing Nifty stocks so far this year. Interestingly, the Nifty Pharma Index is the only sectoral gauge that has given a negative return so far this year.
Automakers, which constitute the second-highest number of Nifty companies, was next on the list of EPS downgrades. Consumer goods makers, on the other hand, saw a marginal upgrade.