Mumbai, Feb 18 (IANS): The corporate earnings for the third quarter of FY21 have improved with several companies reporting better-than-expected numbers and has resulted in upgrade of the earnings per share ratio for Nifty by 3-4 per cent, said a Motilal Oswal Financial Services report.

It noted that sharp demand recovery was seen during the festive season, with the opening up of the economy and the number of COVID-19 cases being contained, coupled with continued cost-saving initiatives.

"57 per cent of the companies in our MOFSL Coverage Universe beat 3QFY21 estimates, while 24 per cent reported below-estimate results. This has resulted in the second consecutive quarter of material upgrades for Nifty EPS," said the report titled 'India Strategy'.

It said that the underlying recovery has led to the 'broad-basing' of growth. The performance, while broad-based, was led by cyclical sectors such as metals, autos, and cement.

As per the Motilal Oswal report, the key factors that drove the better-than-anticipated earnings include sharper-than-expected demand recovery with the opening up of the economy, continued cost optimization measures, the festive season boosting consumption demand across the staples, durables, and discretionary sectors.

Strong operational delivery by the banking and financial sector and cyclical sectors such as metals, autos, oil and gas, and cement were also among the major reasons for the improved earnings.