Even as the second Covid-19 wave threatens to weaken demand and hurt sales, corporate earnings for the January-March period will surge, thanks largely to a helpful base. But the numbers are expected to be reasonably good even after adjustments to the base. The revenues should grow to multi-quarter highs in Q4FY21 on the back of better volumes as well as higher prices. But profits would also get a boost from cost savings and better operating leverage, much like they have in recent quarters.

For the Sensex set of companies, net profits are estimated to soar 55 per cent year-on-year on the back of an 11 per cent y-o-y rise in revenues and a sharp 23 per cent-plus increase in operating profits. For the Nifty 50 companies, the jump in profits is a bigger 125 per cent y-o-y on the back of a huge 17 per cent y-o-y increase in net sales and a 70 per cent y-o-y improvement in operating profits.

The IT services sector, which has turned in spectacular performances in the last couple of quarters, is expected to turn in a good show in Q4FY21, even though it is a seasonally weak quarter

Among the sectors that are expected to do well are automobiles where large volumes — especially in the passenger car and commercial vehicles segments — are believed to have led to better efficiencies, somewhat blunting raw material price pressures. The IT services sector, which has turned in spectacular performances in the last couple of quarters, is expected to turn in a good show in Q4FY21, even though it is a seasonally weak quarter.