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Covid's second wave along with regional lockdowns are expected to dampen the Q1FY22 earnings result season, thereby, unleashing volatility.

Notably, the trend might lead to value correction, this in theory, can trigger another bull run.

However, the scale of this expected trend might only be known via the impact on revenue that different sectors sustained in respect to lockdown's effect on operations and sales.

Other factors such as high commodity and fuel prices along with impact of rural Covid spread on the FMCG demand will exert pressure on Q1 revenues.

In contrast, pharma companies could benefit due to the second Covid wave, besides, metals, BFSI and IT are expected to drive earnings' growth in Q1FY22.

Furthermore, in Q1FY22, Indian corporates have the benefit of a low base, while during Q1FY21 the aggregate net sales of most companies had fallen sharply and their net profits had plunged.

"In Q1FY22, though there was disruption or partial lockdown in several states in April or May due to the second Covid wave, the impact of this on the business activities does not seem to be as severe as in last year. Also states were well prepared this time to deal with the situation," said Deepak Jasani- Head of Retail Research at HDFC Securities.

"Trends in shift from informal to formal sectors, impact of raw material price increase and inventory gains or losses due to China intervention in commodity markets will be interesting to watch out for. In the BFS space, asset quality or slippages trends in the books of lenders will be monitored closely."

Additionally, Jasani said that several high-frequency macro indicators have improved lately including power consumption, auto fuel demand, e-way bills, exports amongst others.

"Rising commodity costs, higher inflation, and a likely rate increase are key concern areas."

According to Gaurav Garg, Haed of Research at CapitalVia Global Research: "The opening of the season was good by TCS, it posted a net profit growth of 28.5 per cent, it also posted a growth of 18.5 per cent in consolidated revenue."

"However, this earnings season may have few surprises as it coincided with the second wave of the pandemic and therefore there might be mixed results."

Garg cautioned investors to be prepared for mixed results owing to the pandemic restrictions in the previous quarter, it may not be extensive as the previous lockdown but still some impact is expected.

"Markets seem to be correcting themselves from their resistance and positive earnings may prove to be the required stimulus to boost market further up."

In a report Crisil Research expects India Inc to report a sequential decline of 8-10 per cent in revenue at Rs 7.3 lakh crore for the first quarter of this fiscal.

The decline might be led by consumer discretionary products such as automobiles, which saw volumes impacted by the lockdowns across states to contain the second wave of Covid-19 infections.

Nevertheless, Crisil Research said on a yearly basis, the revenue will rise 45-50 per cent on a low base.

The report pointed out that improvement will be seen across sectors, riding on higher volume on a low base and greater realisations due to increase in commodity prices.

Factoring out the commodity sectors, on-year revenue growth will be lower at 37-40 per cent, the report added.