Even as the markets continue their upward journey in this earnings season, Manish Sonthalia of Motilal Oswal says that the companies so far have reported better than expected earnings. In an interview to CNBC TV18, Manish Sonthalia, Head of Equities at Motilal Oswal said, “The earnings season is not that bad, as was expected prior to the earnings season. Particularly the GST related sectors etc, I don’t think the numbers which have come out so far are that disastrous.” Yesterday, Harsha Upadhyaya of Kotak AMC said that the rally is not backed by earnings growth. In an interview to BTVi, Harsha Upadhyaya, Head – Equity investments for Kotak Mutual Fund, said that strong earnings will be necessary to sustain the rally. Further, the market expert said that earnings growth will be in the range of 8-12% going forward.
Manish Sonthalia pointed out that the pharma sector woes are likely to continue for at least two more quarters. “Pricing pressure is going to abate in the next two quarters, not going to abate just yet. The pharma companies stocks have priced in all of that pressure. You will see the pressure peaking in the next two quarters. It’s a valuation play, and I should say that the worst has already been priced in,” he told the channel.
Rakesh Jhunjhunwala recently said that the worst is over for the pharma sector. “Everything that could go wrong for the pharma sector, has gone wrong. The US market got very competitive. Rupee depreciated, and the pharma companies had very bad sales domestically due to GST. I would say the worst in behind us. The rebound will depend a lot on the individual companies,” Rakesh Jhunjhunwala told CNBC TV18 last month.
As investors may find it difficult to find value buys at at life-high levels, N Jayakumar of Prime Securities, said that index investing may provide healthy returns. In an interview to ET Now, N Jayakumar, MD of Prime Securities said, “Last time we talked about how indexed investing is not going to hurt people. I think index investing for a lot of people has been beneficial. You may not have got a three bagger, but you’ve got a pretty healthy growth. Portfolio’s are not made of three baggers alone.”