Net profits of Nifty 50 companies could climb 29 per cent on-year in the June quarter on expectations that some of the banks, which had shown significant asset stress a year ago, would perform better. Revenue will likely expand 7.4 per cent and log single-digit growth for the first time in nine quarters, reflecting higher base effect and slowing demand.Banks, construction and cement companies, and capital-goods makers are likely to do better, given the higher rate of loan recoveries, increased capacity utilisation at plants, and rising prices. Automobile, consumer goods, metal and telecom companies are expected to report subdued earnings.“The first-quarter corporate results will have the large base of Q1FY19 as an impediment. High-frequency data in India for Q1FY20 have been largely weak, although some respite was seen in steel and power generation in the first two months of the fiscal,” said Deepak Jasani, research head, HDFC Securities.“The consumer space has also been facing a slowdown, compounded by tightness in the credit markets,” said Jasani of HDFC Securities.Operating margin is expected to contract by 100 basis points (one percentage point) to 20.9 per cent in the June quarter. But it will still be better than the 18 per cent operating margin of the March 2019 quarter.Growth momentum for the rest of FY20 hinges on the pace of demand recovery in various pockets of the economy — rural and urban consumption, and industry.“The economy continues to suffer from slowdown across sectors and tight liquidity. All eyes are now on the budget and the extent to which these concerns will be addressed,” said Jasani.Earnings at auto companies will be under pressure for the second consecutive quarter owing to a sharp contraction in volume growth and lower capacity utilisation. Volume growth of passenger cars, two-wheelers and commercial vehicles dropped 10-22 per cent during the quarter following rising channel inventory. India’s largest car maker Maruti Suzuki’s volumes fell 19 per cent in the quarter, while Hero MotoCorp’s volumes dropped 12 per cent.The declining rate of fresh nonperforming loans at several banks is a major positive for the sector that has been battling poor asset quality for the past several quarters. State Bank of India, Axis Bank and ICICI Bank should report profit recoveries. Retail-oriented lenders, such as HDFC Bank and IndusInd Bank , may report a further slowdown in credit offtake, in lockstep with slowing consumer demand.Capital expenditure by state governments and the public sector is likely to support the performance of capital goods companies. In addition, order inflows during general elections have been better than Street estimates.The effect of rising cement prices was not fully visible in the previous quarter. In the June quarter, large cement companies are expected to benefit from the spillover effect of higher prices. Also, cement production in May rose 2-3 per cent on-year. Revenues of UltraTech, ACC, Ambuja Cements Shree Cement and Dalmia Bharat are expected to rise by 10-15 per cent and net profit by 5-7 per cent.The June quarter results are likely to be affected by a slowdown in demand due to weak macroeconomic conditions amid water scarcity in rural India. FMCG companies are likely to post single-digit volume growth. Advertising spend may remain high as companies continue to invest in brands. The key factor to watch would be management commentaries on consumer demand in an environment of erratic rainfall and a broader economic slowdown.While the June quarter has traditionally been a good quarter for Indian IT companies, unfavourable currency movements and slower project ramp-ups in some cases may affect top line growth. TCS and Infosys are expected to report 2-2.5 per cent sequential growth in dollar-denominated revenues. Operating margins are likely to be under pressure.Lower metal prices and slowdown in the local auto industry will likely affect earnings at metal companies, although a relatively weaker rupee may partially help offset the impact. Prices of steel, aluminium and zinc have fallen by up to 25 per cent from their peaks of last year, which should hit profitability.Pharma companies are likely to continue their improved performance seen in the preceding quarter. While there are no major positives, price erosion in the US market has peaked, aiding their performance in the key market. Cost rationalisation on the R&D front is likely to continue. Sun Pharma, Aurobindo Pharma and Cipla are expected to register improved performances.A gradual decline in pressure on billing rates is the big takeaway for listed telecom companies. This may lead to a modest increase in revenue, but profitability may not improve much due to the intense competition.