These 17 BSE100 stocks saw three FY20 earning upgrades in last 4 qtrs; should you buy?

But, comparatively, more companies have seen an EPS downgrade than an upgrade

Despite an improvement in profitability of Nifty companies to low double-digits in the March quarter, it has stayed below the analysts' expectations.

Domestic cyclicals, primarily financials, led the earnings growth for the second consecutive quarter, contributing almost the entire earnings delta. However, it still fell short of expectations.

Muted demand, ongoing liquidity crisis in the NBFC sector and concerns over the global trade war were some of the factors that capped the upside. After the Q4 show, most brokerage firms have downgraded their EPS (earnings per share) estimates for FY20 for Nifty.

Elara Capital downgraded Nifty EPS for FY20 to Rs 612 and FY21 to Rs 735 (1.4 percent) from the past quarter, primarily led by energy, materials, and telecom.

At the current levels, FY20 EPS reflects 25 percent growth over FY19, hinging largely on earnings expansion in banks, cement, telecom and healthcare.

Edelweiss Research in a note said that despite a 5 percent cut in FY20E Nifty EPS, Street estimates are still quite high—27 percent growth for FY20 and 18 percent for FY21.

Many companies have also seen an upward revision of their EPS estimates. Elara Capital in a note highlighted 17 BSE100 stocks that saw EPS upgrades in the three out of four quarters. They include HCL Tech, DLF, Tech Mahindra, ITC, HPCL, BPCL, Wipro, Adani Ports, DRL, Bajaj Finance, Coal India and M&M, among others.

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