Investigating the effect of industry focus on market ability to predict the future profits of companies listed on the Tehran Stock Exchange

Profitability and its predictive power are beneficial to investors and help them estimate the risk and expected value of securities returns. But various factors affect accounting profit and its predictive ability, one of which is the competition in the industrial market and the concentration or decentralization that exists among companies operating in an industry. This factor causes the behavior of companies in addition to the performance facts of the company itself, to be affected by the behavior of competitors and the ability of the firm to influence. Therefore, based on this argument, in the present study, using a sample consisting of 92 companies listed on the Tehran Stock Exchange during the years 1390 to 1398, seeks to investigate the effect of industry focus on the market ability to predict future profits. Analysis of the results shows that, first, the ability to predict future profit slowdown for firm performance is not significant. In fact, there is no statistically significant relationship between the profits of last year, this year and next year with the returns of firms. Second, the results showed that the ability to predict accounting profit is not affected by industry focus, and accounting profit last year, this year, and next year under the influence of industry focus do not have a significant effect on firm returns. Third, the market power of the industry is able to significantly affect the returns of firms through accounting profits of the previous year, while accounting profits of this year and next are not affected by the market power of industry on the returns of firms, and finally competition in the industrial market Explaining the returns of firms is effective but does not affect the relationship between the profit of the previous year and next year with the returns of companies.