Q1 Earnings Review - Optimism Returns But External Challenges Remain: KRChoksey
Q1 Earnings Review - Optimism Returns But External Challenges Remain: KRChoksey
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KRChoksey Research Report
Earnings growth in Q1 FY22 was driven by low base in the corresponding period last year owing to the nation-wide lockdown in 2020.
However, Covid 2.0 negatively impacted financial performance of coverage companies due to localised lockdown and consequential decline in business sentiment.
Significant fiscal and monetary stimulus to tackle slowdown caused by the pandemic, has resulted into higher commodity prices and inflationary pressures.
Sectors such as automobiles and consumer witnessed higher raw material prices in the form of steel, metals, agricultural and dairy products.
We believe that inflationary pressure may sustain, and companies will take another round of product price hikes to sustain their operating margins.
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