Expectations of an ea-rnings recovery is gaining ground as India Inc’s big boys continue

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to surprise most analysts with their last quarter’s numbers. A slew of companies that reported earnings on Wednesday underlined this trend.

Sample this. Wipro, India’s third-largest software services exporter, beat analysts’ expectations by reporting better-than-expected net profit for the first quarter ended June 30.

The company’s net profit increased 12 per cent to Rs 1,015.50 crore in the April-June quarter mainly on account of better operating performance.

Analysts were expecting Wipro to deliver net profit of Rs 920 crore, as per estimates compiled by Bloom-berg. The company’s operating margin for the quarter was 18.5 per cent compared with 17.1 per cent in the year-ago period. Wipro join-ed its larger peers Infosys Technologies and Tata Consultancy Services (TCS), which also reported results beating Street expectations.

“Good run up in the stock post Infosys/TCS results implied that most positives from Wipro Q1 were already discounted,” Citigroup analysts Surendra Goyal and Vishal Agarwal wrote in a no-te to clients. Till Wednesday, Wipro shares have gained more than 21 per cent post Infosys results on July 10.

Mortgage lender HDFC posted nearly 21 per cent increase in net profit at Rs 564.92 crore for Q1 FY10 compared with the year-ago period. The company reported higher profit growth as demand for home loans picked up due to fall in property prices and lower interest rates.

Bharat Heavy Electricals (Bhel), which also reported its Q1 results on Wednesday, came out with numbers above expectations or in line with the analysts’ estimates. Its strong order book position and a guidance of 25 per cent revenue growth next quarter has made the company a hot pick, analysts say. However experts believe the stock is trading on a higher side as of now.

“We think the right level to buy Bhel would be between Rs 1700-1800 levels,” said Ambareesh Baliga, VP and research head at Karvy Stock broking.

Hindustan Zinc’s first quarter result has either beaten or has been on par with analysts’ estimates.

According to Religare Securities, the results were slightly above its expectations (5 per cent above estimate on net profit levels). The EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) margin at 51 per cent was in line with the brokerage’s expectations, while net sales was 13 per cent above estimates.

“This quarter’s performance will continue in the next quarter as well as the zinc prices are expected to remain stable from these levels. We can see some improvement on bottomline as other income component increases,” Amitabh Chakraborty, research head at Religare Securities, said.