the stock market has rallied in the past few years based on the expectation of an impending earnings revival the revival hampered by demonetisation and problemriddled gst rollout among other things seemed to be getting postponed indefinitely however finally earnings have begun growing in line with street expectations due to the low base effect the earnings expectations for the third quarter were high and the results so far have been in line with the high expectations says vinod nair head fundamental research geojit financial services pankaj pandey head research icici direct concurs we have not seen any major disappointment in this results season so far profits grow even as expenses rise the aggregate revenue and net profit of 1078 companies that have declared results so far have gone up 13 and 27 respectively yearonyear the earnings revival is also visible in the recent jump in sensex eps but investors should not assume that the results season will end with an aggregate 27 earnings growth since companies with good results usually show their report cards first the earnings growth of the remaining companies is likely to lowersensex earnings per share rose 10 this will pull down the aggregate earnings growth and investors need to moderate their growth expectation for the third quarter to a more reasonable level of 1520 it is important to keep in mind that low base is the main reason behind the earnings revivalthe poor corporate numbers during the third quarter of 2016 due to the demonetisation account for the high yoy earnings growth in the third quarter of 2017 you might also likestay put in equities increase allocation to debt instrumentssince the impact of demonetisation spilled over to the fourth quarter of 2017 yoy growth in the fourth quarter of 2018 too will be on the higher side since the earnings pickup is strong we may see a decent earnings growth in the fourth quarter of 201718 as well says anand shah deputy ceo and cio bnp paribas mutual fund revival in global commodity prices is another factor supporting the earnings growth the steel sector has seen the maximum jump in earnings mostly because of the very low growth during the same period last year sectors with highest growth in earnings sectors with lowest growth in earnings note value in brackets denotes companies that have reported results losses have increased from rs 827 cr to rs 1315 crsource etig databaserevival in global commodity prices is also helping other sectors including oil and gas zinc iron ore coal etc this is indirectly helping the banking sector as well fall in commodity prices and the nonperforming asset npa issues of banks were the two major factors preventing an earnings revival since a major portion of the npa troubles are linked to commodity producers banks npa provisioning will start coming down as their health improves says shah you might also likequality largecap stocks could be better bets as risk loses its lurehowever the pressure of npas on public sector banks