Demand in villages and small towns outpaced cities in the April-June quarter, a sign of India’s broad-based economic growth. Avenue, operator of DMart supermarkets, may have sold more cold drinks, ice cream and hygiene products as a prolonged heat wave pushed temperatures across India to new highs. Motorcycle maker Bajaj Auto’s monthly sales reports show fewer inquiries and deferred purchase decisions by potential customers due to extreme weather. Both will benefit from the forecast of an above-normal monsoon.
India’s Finance Minister Nirmala Sitharaman is widely expected to propose measures to boost consumption when she presents the federal budget on July 23, further boosting consumer-facing firms and retailers hit by weak rural spending in the past few quarters.
Meanwhile, the Taiwan semiconductor manufacturing company is projected to report its strongest growth for quarterly earnings since the end of 2022. Sales for June also beat expectations amid growing demand for AI infrastructure. Earnings optimism pushed the firm’s Taipei-traded shares past NT$1,000 last week, briefly surpassing $1 trillion in market capitalization.
The AI boom should also fuel demand for services offered by Indian IT exporters Infosys Ltd and Wipro Ltd. Sector leader Tata Consultancy Services Ltd on Thursday reported profit in line with analysts’ estimates, signaling corporations are gradually resuming spending on projects.
Highlights to watch:
Saturday: Avenue Supermarts (DMART IN)’s profits should be buoyed by continued expansion of its store count and improving consumer appetite in India. First-quarter revenue rose 18%, the firm said in a pre-earnings update, and consensus projects 19% profit growth. A lower share of apparel sales continued to affect revenue per square foot of store area, Citi analysts said.
Tuesday: Bajaj Auto (BJAUT IN) may see its slowest profit expansion in five quarters as heat waves in parts of India muted vehicle sales growth. According to the Federation of Automobile Dealers Associations, the weather and the election reduced the number of people in showrooms and delayed purchases. The company launched a new CNG-powered motorcycle earlier this month, which could help it further increase its share in that product category, Jefferies said.
Wednesday: Asian Paints ( APNT IN ) first-quarter net income should fall 9.2%, consensus estimates show. Jefferies said revenue growth was muted due to price cuts and a weak mix. Gross margin gains are also expected to be partially offset by higher costs and negative operating leverage, according to Kotak Institutional Equities.
Thursday: TSMC (2330 TT) second-quarter net income likely to rise 29%, estimates show. Several brokerages, including Morgan Stanley, have raised price targets for the chipmaker as businesses race to secure hardware to build AI-supporting infrastructure. Among the key highlights for its upcoming earnings is how much TSMC can negotiate to raise prices after seeing strong demand for the product.
Infosys’s ( INFO IN ) first-quarter net income will be supported by higher revenues across segments, estimates showed, even as financial industry revenues fell slightly. Emerging technologies account for more than 60% of its total sales, but the Indian IT company’s near-term growth is likely to be pressured by weak enterprise IT spending, Bloomberg Intelligence said.
Friday: Wipro’s (WPRO IN) first-quarter revenue may be lower in constant currency terms, but margins are expected to expand, according to estimates. Nomura’s analysts expect Ebit margin to expand on its continued cost control program and higher utilization at Capco. Recent strategic partnerships with other companies such as Siemens for automotive software should support the company’s earnings in the long term.
Friday: Wipro’s ( WPRO IN ) first-quarter revenue may be lower in constant currency terms, but its margins are expected to expand, according to estimates. Nomura’s analysts expect Ebit margin to expand on its continued cost control program and higher utilization at Capco. Recent strategic partnerships with other companies such as Siemens for automotive software should support the company’s earnings in the long run.
(You can now subscribe to our ETMarkets WhatsApp channel)
