India Consumer Earnings Key as Markets Hope for Demand Rebound

(Bloomberg) -- Asia’s earnings focus turns to India’s consumer sector, as investors look for signs that economic momentum is recovering after central bank rate reductions and income tax cuts take effect.

Efforts to shore up the Indian economy are under way as it gradually recovers after a consumption slowdown last year. The Reserve Bank of India has cut the key rate by a cumulative 100 basis points so far this cycle, with the governor in June declaring the battle against inflation had been won. The country’s two largest private sector lenders HDFC Bank Ltd. and ICICI Bank Ltd. both beat profit estimates on Saturday.

India’s new tax bill also exempts 11 million more people from income taxes, another move to boost consumption in Asia’s third-largest economy.

On Thursday, Nestle India Ltd. should show improved volume growth led by a recovery in rural demand, with urban recovery yet to catch up. It’s also expected to benefit from a cut to palm oil duty and fall in coffee prices, according to analysts from Nuvama Institutional Equities.

Tariff concerns will cloud Infosys Ltd.’s Wednesday update after rival Tata Consultancy Services Ltd. said many American clients were cautious about tech investments given ongoing economic uncertainty. Shares in Tata Consultancy Services, HCL Technologies Ltd. and Tech Mahindra Ltd. all fell after their earnings reports, with the latter two missing estimates.

Highlights to look out for:

Monday: Eternal’s (ETERNAL IN) first-quarter profit is expected to halve on losses at its quick-commerce business Blinkit. The unit is investing in expanding its “dark stores” network, where it services quick-commerce orders, and analysts will watch for updated guidance on when profits are expected. Strategic steer on its new “Going Out” business will equally be in focus.

Tuesday: No major earnings.

Wednesday: Infosys (INFO IN) could lower or pull its revenue growth guidance as demand for new projects deteriorates amid worsening economic conditions, BI said. Watch for commentary on whether clients are canceling projects, especially in industries hit by US tariffs, Kotak Institutional Equities said.

Thursday: Nidec’s (6594 JP) sales would likely be affected by uncertainties in the auto market, as demand for electronic parts and motors slow in Japan, according to BI. Founder Shigenobu Nagamori said the firm’s appetite for takeovers remains intact, following its earlier decision to withdraw a $1.8 billion hostile bid for Makino Milling Machine Co.

Friday: No major earnings.

(Updates throughout.)

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