Which Sectors will Draw Maximum Attention of Investors?

Last ten days have been very eventful for the market. The traders a sharp fall amid political tension between India and its neighbor Pakistan. However as soon as the tension subsided Nifty share price picked up and went back to the level of 8800. Wednesday and Thursday saw some profit booking though and the index gave correction.
The June quarter saw a mixed basket of earnings and all categories of investors are hoping for a stable September quarter, which could be one big trigger for the market to break out of the range as established over the past few weeks.
Both bottom-line and top-line growth of companies is expected to remain subdued; however the sectoral churn has been encouraging, say experts.
According to the experts some of the sectors that saw unenthusiastic depressed earnings growth in last two years – namely metals, capital goods and cement – are now showing traction in earnings.
Domestic investment companies are hugely anticipated to report more than 25 per cent profit growth for the second consecutive month. However, profit growth in relatively defensive sectors like that of IT and FMCG is expected to slow down further from the existing subdued levels.
Domestic investment sectors consist of utilities, engineering and capital goods, cement, agro and fertilizer related stocks, construction and real estate.
IT and FMCG companies are likely to register eighth consecutive quarter of single-digit growth in profit. However, consumer discretionary might remain steady with profit growth of 20 per cent on a base of more than 20 per cent growth.
The expected net profit may increase 15.3 per cent on a year-on-year (YoY) basis, led by a sharp rise in profits of downstream oil companies, added a market expert. He added that one can expect companies from auto, cement, and consumer products as well as industrials sectors to report YoY growth in net income.
He further mentioned that banking sector is dragging the overall earnings, as domestic lenders are likely to make high provisions for bad loans. Market expects net profit of the BSE30 index to grow 4 per cent YoY.
As for top-line growth drivers, the private banks, auto as well as media are some of the sectors that continue to post double-digit growth at an accelerated speed.
The top line of Nifty companies is estimated to grow 6 per cent YoY on a cumulative basis. While Yes Bank, Kotak Mahindra Bank, IndusInd Bank and Eicher Motors are likely to post healthy top-line growth of over 25 per cent YoY, top line growth of GAIL, Tata Power and Dr Reddy’s is likely to contract over 10 per cent.
As for fifty one Nifty companies, profits are estimated to grow about 7 per cent YoY. If these estimates fructify, Nifty 50 top-line growth will be mere 5 to 6 per cent in the first half of FY17. This is much lower than consensus full-year EPS estimate of 15-18 per cent.