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The corporate earnings growth during the first quarter of the current fiscal is largely led by the banking, financial services and insurance (BFSI) sector and also helped by credit cost moderation, Motilal Oswal Financial Services Ltd said in a report.

Studying the results of corporates tracked by it, Motilal Oswal said that the BFSI sector has driven 124 per cent of the incremental year-on-year (YoY) earnings growth during the 1QFY23 which was largely subdued.

Loan growth has spiked fueled by continued momentum in retail and small and medium enterprises (SME) segments. Oil and gas and automobiles have been laggards while metals and cement sectors posted weak numbers expectedly, the report said.

According to Motilal Oswal, the first quarter was a mixed bag for IT companies under its coverage universe reporting an overall revenue growth of 1.9 per cent quarter-on-quarter (QoQ).

Amid heightened concerns over a weakening macro environment, management of most of the companies are not seeing any impact on the pipeline. A majority of the companies delivered good deal wins and highlighted a strong pipeline.

Attrition inched up across the industry and remains a near-term concern.

On the banking sector, the report said that the growth momentum has remained strong over 1QFY23 propelled by healthy trends in the corporate portfolio, while growth in retail, business banking, and the SME segments continued to shine. Lower provisioning costs drove earnings and the BFSI universe registered a 63 per cent profit growth.

The severe volatility in feedstock prices and high inflation concerns instigated the slowdown in global intermediates and polyester markets, Motilal Oswal said about the oil and gas sector.

The topline of automobile companies were largely above or in-line, so far, driven by price hikes, improved mix and favorable forex (for exporters).