"By our analysts' estimates, the BSE Sensex earnings will drop 0.2 per cent year-on-year compared with a growth of 5.5% and 20% in the September 2008 and June 2008 quarters, respectively," the brokerage said.

A compression in EBITDA margins will likely offset revenue growth, analysts Sheela Rathi and Ridham Desai said in the research note.

They expect revenue growth at 14 per cent, excluding the energy sector, and 7 per cent including it.

The cycle of negative operating leverage, deceleration in net financial income and profit growth will continue and may lead to more negative earnings revisions, Morgan Stanley explained in its earnings preview.

"If earnings fall for the coming quarters, it should surprise nobody," the note said.

The brokerage expects EBITDA margins will likely rise for healthcare, energy, and technology companies, while those of materials, industrials, utilities, and consumer discretionary goods companies may see a sharp fall.