Abhay Laijawala, head of research, Deutsche Bank

We feel FY18 consensus estimates are on the higher side. Hence, there is a risk of downward revision to these estimates. While the impact of demonetisation should normalise after April, the implementation of Goods & Services Tax (GST) from July is likely to weigh down on earnings in the near term. In the long run, GST will prove to be positive as it seeks to simplify the indirect tax structure, but in the near term it can be disruptive. The three-month period following GST, earnings growth will come under pressure as the system adjusts to a new tax slab. We will have to wait for the final contours to understand the implications of the tax structure for different sectors. So, as things stand today, the probability of earnings expectations being lowered is much higher.

Vikas Khemani, president & CEO, Edelweiss Securities

We are at the bottom of the earnings cycle and are already seeing a broad-based recovery taking place. This should aptly reflect in FY18 earnings. We estimate around 15% growth for the current fiscal. On the demand side, we are already seeing a revival. Volumes are gradually picking up pace and we should see operating leverage too kicking in. The combination of these two will lead to a margin expansion and we should see a sharp rebound in earnings. Beaten-down sectors such as metal and PSU banks will start contributing to earnings as well. What’s important to note is that earnings were downgraded post-demonetisation on fears that it would have a long-term impact. However, the concerns related to demonetisation are well behind us. Going ahead, not only domestic growth but global growth will also help earnings post a sharp improvement.