April 9, 2018 / 8:12 AM / 4 months ago

BUZZ-CY 2018 to be volatile for Indian stock markets - Citi

** Calendar year 2018 will be volatile for Indian stock markets, says Citi

** Citi cuts Sensex target to 35,700 by December 2018, factoring in downward earnings revisions

** Says its estimates factor in about 20 pct earnings growth for both Sensex and Nifty in FY19 and that FY18 earnings likely to post single-digit growth

** Credit costs for financials likely to remain elevated in first half of fiscal 2019, while continuing competitive pressures on pricing/profitability in healthcare and telecom, earnings downgrades are key risks for markets over rest of 2018 - Citi

** Key drivers for Q4, 2018 earnings to be energy, domestic autos and metal sectors; Financials, pharma and telecom to be biggest laggards - Citi

** Maruti Suzuki India’s better mix could aid margins, Jindal Steel and Power’s volume ramp-up and positive operating leverage and Cadila Healthcare’s higher-than-expected sales of flu prevention drug are potential surprises - Citi

** Idea Cellular’s higher ARPU drop given competitive intensity and Dr. Reddy’s Laboratories’ higher-than-expected price erosion in certain high-value products are among potential negative surprises - Citi

** Mid-cap companies are likely to see strong rebound in earnings, mainly due to strong performance in steel sector - Citi

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