This is the beginning of the third quarter’s results season. The markets have been through a correction over the last couple of months due to the under-performance in the last results season, and nervousness in the global markets. Analysts advocate caution, especially with stocks and sectors that have a significant exposure to the European markets.

These are some sectors that will be on the radars of analysts and investors during the coming quarterly results season:

Auto

Companies in the auto sector are upbeat on the back of positive consumer sentiments, especially in the middle income segment. Sales went through a dip towards the end of last year. However, the auto companies are expecting a revival in growth on the back of new launches planned this year and expectations of monetary policy softening in the near future.

Investors should analyse strategies and growth plans of leading auto companies in the current results season. This will offer an indication of expectations this year.

Banking

Stocks in the banking sector went through a correction over the last couple of months. There are expectations of some monetary easing by the Reserve Bank of India (RBI) in the near future. This will help in pushing credit off-take as well as in easing margin pressures on banks. The significant factor to track is the strategies to increase the non-interest-based income, and strategies to reduce non-performing assets.

The investment potential seems good in the banking sector as the valuations have come down over the last couple of months. Long-term investors can use the correction in banking stocks to enter and accumulate fundamentally good stocks.

FMCG

The FMCG companies performed well last year. They raised prices of their products in the markets. Their strategies in the forthcoming results season are significant as the inflation rate is coming down. The consumer sentiment is expected to remain good in the coming months and large players with diversified product offerings in the FMCG sector are expected to do well.

IT will be a top sector to watch in the coming results season. The guidance is significant as the economic environment in the West is uncertain. The third quarter numbers are expected to be rosy due to the sharp depreciation in the rupee against major world currencies. Analysts will be tracking the top IT companies’ management outlook and guidance closely apart from their business prospects. The top and bottom line numbers of these companies too are significant in the current results season.

Public sector undertakings

The results of public sector undertakings (PSU) are important as there are talks of funding the fiscal deficit. PSU stake selling in the secondary market by the government did not go well last year. That is why the government is looking at various other alternatives such as buy-back of equity by PSU firms from the government. high dividends from the cash-rich PSU companies etc. You can expect more clarity on these aspects during the results season from leading PSU companies.

Real estate

The results of real estate companies will be on the radars of investors after a long time as the realty sector is picking up. The real estate companies have been able to sell their projects (both in the housing as well as commercial segments ) in the recent past and have also raised the prices of properties, especially in the luxury segment. Going forward, there are talks of monetary easing and this is positive for the realty sector.