EARNINGS GROWTH
PE re-rating room very limited in PSU space: Gautam Sinha Roy
And if you see last year the earnings growth was also coming from margin expansion, which has limited room to expand going forward, so that is something that will be critically watched for going forward.
Market may be marginally disappointed with Q1 result season: Jitendra Sriram
"While the consensus earnings for FY2024-25 are in the low teens, we expect the growth to be more in 2H," he said, explaining that elections and heat waves slowed down economic activities during the quarter.
Can manufacturing stocks go further up from current levels? Deepak Shenoy answers
We are actually looking at results and saying, okay, some early part of the results were a little disappointing, especially in banking, but we are seeing good results coming from the manufacturing companies so far.
Should you put fresh money in the market now? Pramod Gubbi answers
Pramod Gubbi from Marcellus Investment indicated that despite high market valuations, pockets of value with predictable earnings growth exist. He discussed opportunities in private banks, autos, and specialty chemicals, emphasizing a bottom-up approach. Key triggers include global factors and economic changes affecting sectors and stocks. Investors should be discerning and focus on earnings potential.
Market unlikely to remain unidirectional; expect volatility & cyclicality going ahead: Ashish Gupta
So, the direction of the market is really dependent on how these volatile components behave and the message we want to give out to investors is that they should expect markets to be volatile, markets to be cyclical. It is unlikely that markets will always be unidirectional.
Market returns will revert to corporate earnings growth rate of about 14%: Rashesh Shah
The market returns will revert to what the corporate earnings growth rate is and I do believe that corporate earnings long-term growth rate should be about 14% or so in India and that is what a good long-term investor in the market should get, says Rashesh Shah, Chairman, Edelweiss Group.
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What should you do with Nestle stock after its Q1 earnings? Preeyam Tolia answers
So, if you see from a medium-term perspective or a shorter-term perspective, there could be some pressure because of the margin pressure. But on a longer-term basis, we continue to remain positive on Nestle because there are two-three reasons for that.
Budget reforms aiming to sustain long-term growth: Trideep Bhattacharya
I think it is a great spot and the way I would frame it is, I will add one more point to it. If you look at the delta between the interim budget and the final budget, it was basically the allocation of the RBI dividend and if you sub-aggregate the RBI dividend which was to the tune of 40 to 50 basis points of GDP, the government allocated about 17 basis points to increasing rural spend and employment generation schemes and all of those things which will boost employment over the medium term.
Overall earning season turning out to be muted: Sandip Sabharwal
So, the key will be the resolution of the issues pointed out by RBI and once that happens, that will be sentimentally positive, so that is how it is placed. Overall earning season is turning out to be muted in general.
Sachin Trivedi on how to trade in cement stocks in near term
The government has been acting as a catalyst in past years. I think the government should promote policies that encourage the private sector to do more capex. Remember, all the earnings growth that we have seen in the past couple of years was on the back of the capex done in the last decade.
Jio and Retail: The future game changers for Reliance, says Deven Choksey
"Reliance's EBITDA was temporarily impacted by refining cracks, but growth in Jio and retail is steady. We anticipate 15-20% ARPU growth and potential demergers, leading to a stable stock price," says Deven Choksey.“In the Jio platform, we are likely to see a higher amount of growth because the full impact of the price hike or tariff hike in the ARPU is expected to happen somewhere in the subsequent quarters of the current financial year,” says Deven Choksey, MD, DRChoksey FinServ Pvt. Ltd. Edited excerpts:
Will there be more upside for Infosys stock after its Q1 earnings? Mahantesh Sabarad answers
Yes, of course, the guidance, the upgrade and the number beat should mean that we will have a lot of upgrades happening from the street, upgrades particularly in terms of later quarter, that means the run rate would likely start growing or remain elevated as we move ahead. So, it will not be just 200 or 300 bps in terms of upgrades of earnings, it could be well over 400-500 bps kind of number.
Bull market not over; expectation of high earnings growth, rate cut taking markets higher: Mark Matthews
I think we could get a 10-15% drawdown, why not? I mean, if you go back 40 years for the S&P 500, for example, the maximum peak to trough drawdown is 14% on average every year since 1980.
Chakri Lokapriya says yes to FMCG but no to paints; sticks to leaders in cement
The FMCG sector is poised for growth with rural recovery, but paints face emerging competition. Infosys and TCS may see 2-2.5% revenue growth and gain from a possible US rate cut. Cement volumes grow despite weak pricing. Asian Paints encounters price drops amid competition. Zee Entertainment's fundraising and the RIL-Disney JV impact the sector.
Pawan Parakh on 3 sectors that will see sharp rise in earnings
Pawan Parakh highlights pharma's revenue growth from pipelines, multi-year potential in defence, and telecom gains from tariff hikes and 5G shifts. Airtel's Rs 300 ARPU target is crucial. Renewables and automation see margin improvement via operating leverage. Defence export commitments to Southeast Asia highlight India's atmanirbhar focus, with Sunil Mittal underscoring enterprise telecom.
No doubt in India's long term story; don't see much scope for big earnings downgrade: Sanjeev Prasad
So, at this point in time I do not know whether there is much scope of earnings upgrades. Also, keep in mind the fact that in the last few quarters, a lot of earnings growth has come from positive surprises or increase in profitability and margins, not so much as volume growth. And fortunately, in some sectors, we are still not seeing really meaningful signs of volume recovery.
Budget 2024 could give growth fillip; 3 auto stocks to buy on dips: Sandip Sabharwal
Sandip Sabharwal says that unlike most of the time in the last few years when he had considered that the Budget would not be important, this time it could be because it could be used as a platform to give a growth fillip. So, the Budget is a significant event because there are a lot of expectations this time from the Budget in terms of potential tax relief to boost consumption.
Expect portfolio companies to generate at least 25% earning growth: Aveek Mitra
Aveek Mitra says he would not look into a particular number of whether this tax collection has increased or decreased or things like that. But he would like to see the new changes or reforms that are coming at the policy level. He expects the Budget will meet my concerns of employment, education, healthcare, and things like that.
Fully invested in market; banks continue to remain reasonably priced: Anand Shah
Today we have 65% of population living in rural India, 35% of people in urban India. It is very difficult to improve per capita income and consumption for somebody who still remains in the rural part because to take factories, to take jobs to the rural India will be very difficult.
Strong domestic liquidity and earnings growth helping markets to stay higher: Anand Shah
We all debate what are the risks in the market, what can go wrong in the markets, the fact of the matter is the large corrections in market do not come because of the known risks, generally they come from the unknown risks.
India providing enough secular themes for global investors for medium-term: Surendra Goyal
So, more medium term, that is how we think about it and it does provide some kind of a support, say for example, this year in the first four-five months we saw foreign outflows, but yet the market has continued to see a nice move up.
Expect market to consolidate; be a buyer on dips: Surendra Goyal
So, it is a lot domestic in nature and that is what in our view is driving the markets more. And even from a flow perspective, it has been all about domestic flows and not as much about foreign flows so far this year.
M&M a buying opportunity; stay away from Raymond: Chakri Lokapriya
RSB LLP’s Chakri Lokapriya notes weakness in Nifty earnings due to IT, pharma, and metals, though broader markets do better. Upcoming Budget and US CPI are critical. M&M’s EV, farm segments, Raymond’s lifestyle turnaround, auto sector discounts, railway stocks’ growth, defensive stocks, Mahindra & Mahindra Financial Services, Tech M, and engineering innovation should be observed.
Power is going to be a multi-decadal growth story: Shreyash Devalkar
As a result, we are seeing good flows in the multi-cap category compared to large-cap, which used to be the case earlier. Even the large-cap category has started getting returns. So yes, this is widespread and increasing as of now.
ETMarkets Smart Talk: India’s small & midcap are commanding premium valuation than the world SMID: Sahil Kapoor
Equity markets continue to scale new highs and trade at rich valuations. Small & Midcap stocks continue to trade at expensive valuations, which is a sign of caution.The Nifty 100 Index is trading at 22x 12-month forward earnings, Nifty Midcap 150 is at 32x, Nifty Smallcap 250 Index is at 24x 12-month forward earnings.
Ajay Vora expects 16% compounding earnings growth; sees banks and metals doing better this year
“Ajay Vora says overall profit growth for FY25 is expected to come from banks and metals because last year a large part came from autos, but this time, auto as a sector or even IT as a sector is going to be pretty muted. But banks and metals will be contributing in a big way.”
Bullish on telecom stocks; ARPUs will continue to move up: Sridhar Sivaram
Financials, I already spoke about. Power and power equipment is something that we really like because we think that in the wind and in solar we could see doubling of capacity in the next three-four years.
Earnings may decelerate from current levels for next 1-2 years: Sridhar Sivaram
So, the largecaps look fine. The problem is when you go to midcap and smallcap, their five-year CAGR is 30% and earnings have not been there, so they have had a significant re-rating.
ETMarkets Smart Talk: Union Budget 2024 likely to focus on fiscal discipline, tax rationalization & driving capex cycle: Jiten Doshi
While the market did react sharply to a scare of discontinuity against single-party-majority system which we witnessed for the last decade, it soon corrected upon assessing the construct of the new coalition and the structure of cabinet which clearly drives on a dominant thread of continuity in the core ministerial council and portfolios – giving market a comfort on no possible diversion from the expected policy path when it comes to economy and capital markets.
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