What will this year bring for India? Will the economy continue to slow down and the rupee slide?
Will bears turn into bulls and offer opportunities for businesses both at home and abroad? The National looks at some of India's largest companies across sectors and their prospects for this year.
India's IT sector is breathing a collective sigh of relief after a difficult year last year. If the global technology spending indicators are anything to go by, this year will be better.
For Infosys, India's biggest IT company, with a turnover of US$6.8 billion (Dh24.97bn), this year means trying to sail out of choppy waters. Many of its clients have been badly hit by the downturn and customers are looking to scale down their IT spending.
"At least for the first half, we are expecting only moderate growth," said Ankita Somani, a research associate at Angel Broking.
The rest of the year may offer better news, she added. "If the economy picks up, the second half could be better, but it is affected by the macro-economic situation. Companies are slowing down on discretionary spending, but about 3 to 4 per cent growth in corporate IT budgets is not all bad news for Infosys," she added.
Infosys could manage to increase market share as a result of European companies looking to make cost savings by further outsourcing their IT infrastructure and back-end operations to India. "This is good news for Infosys and presents attractive business opportunities," Ms Somani added.
Fuel prices are subject to major political wrangling in the country.
And Bharat Petroleum (BPCL), the country's largest oil refining and marketing company with more than 8,500 retail outlets, knows all about it. Sector analysts said the government fuel subsidy policy causes oil companies to underperform. BPCL is similarly plagued by the deregulation of the fuel market in India.
"Oil marketing companies in India currently sell diesel, LPG [liquefied petroleum gas] and kerosene at fixed retail prices at a loss. The government compensates them for selling fuels below cost prices, but [the] mechanism is highly uncertain. With the compensation not being timely, the companies have to borrow to fund these losses," said Amit Rustagi, an oil, gas and utilities analyst at Mumbai's Antique Stock Broking.
Analysts believe the state will intervene before it's too late. "For 2012, the government is expected to consider raising fuel prices more frequently as under-recoveries are mounting and help to reduce the oil companies' debt," he added.
But it's not all bad news, Mr Rustagi said. "The Oil sector is also expected to benefit from appreciating rupee versus dollar, as it has appreciated 8 per cent since beginning of 2012 ."
India's domestic automotive sector is jittery, as car showrooms fear customers will continue to stay away due to rising interest rates and fuel prices. Tata Motors is the largest commercial vehicle and third-largest car manufacturer in the country, with revenues of about $27bn.
"For the domestic business, sluggish economic activities have taken a toll on the company's car parts segment. Also, the deteriorating domestic car franchise is vulnerable to heavy competition in the compact car space," said Ashish Nigam, a motor industry analyst for Antique Stock Broking.
The good news is the luxury car sector is expected to do well on the back of increasing demand from emerging markets, especially China, analysts said.
The sector was suffering from the falling rupee, too, but they said it was not all grim, as many hope the rupee pick-up would continue, and the outlook for Tata remained good.
"The operational currency exposures have moved favourably - the positive impact from this normally comes with a one-quarter lag and, hence, we expect margins to improve in the coming quarters. Barring the short-term currency impact, longer-term margin catalysts also remain positive - sourcing from low-cost countries is on the rise," Mr Nigam said.
The banking sector in India is the most carefully watched because the sector is often seen as the trend-setter of equities performance and because bank stocks weigh heavily on the Indian stock indexes.
ICICI Bank is India's largest private sector lender, with a turnover of $8bn. Overall, analysts say the private banking space is likely to be stronger than the public banking sector, which is seen as more fragile and sensitive to economic downturn.
ICICI itself is in rude health, according to market makers, despite earlier concerns on the bank's asset-class quality.
Alok Kapadia, a research analyst from Antique Stock Broking, was positive on the sector and saw further optimism for the bank's prospects overall.
"ICICI Bank's future is good because the bank management has overhauled the underwriting process, de-risked the balances sheet and focused on current and savings accounts," he said.
The company's challenges include managing credit growth and asset quality. But regardless, analysts remained positive about the company.
"This year will bring better quality of earnings and better return ratios. There are some stressful issues in the sector, but interest rate cycle peaking is a significant positive," Mr Kapadia said.
Indians love to talk on their mobiles. And that is good news for Bharti Airtel, India's largest operator, with a turnover of $11.9bn and operations in 19 countries across Asia and Africa.
The company is expected to retain its momentum.
"The sector itself is doing well. With Bharti, the planned tariff hikes are to benefit margins," said Ms Somani. Mobile internet use is taking off in India and data traffic is a key growth area for the company.
"It certainly presents an attractive opportunity for Bharti Airtel, with data traffic bringing in 15 per cent of the revenues and with growth prospects of 10 to 12 per cent annually," she said.
Application development maintenance is also another opportunity for the company.
"Bharti is able to offer a full product portfolio for its customers, which makes an attractive business proposition," Ms Somani said.
The only downside could be various regulatory issues plaguing the sector in India.
"The new telecoms policy is expected, which could bring about licensing issues and liabilities for telecoms companies," she said.