Even as many corporate heavyweights have already declared their numbers for the quarter, Mihir Vora of Max Life Insurance says that earnings momentum most return to sustain the stock markets. In an interview to CNBC TV18, Director & Chief Investment Officer, Max Life Insurance said, “ I guess it’s a bit of consolidation, it’s down 2-3% from the peak, which is fine. But the fact remains that we need earnings momentum to come back to the stock market.” Yesterday, Sanjeev Prasad of Kotak Institutional Equities pointed out that even though the earnings season has been better than expected, the first half seen as a whole hasn’t seen growth. “If you look at the first half numbers in totality (in the first half), there hasn’t been growth in the EBITDA level so far. So hopefully we will see some growth in the next half as we go forward,” Sanjeev Prasad told the channel.
However, many top experts including Rakesh Jhunjhunwala point out that there are early signs of earnings recovery. According to a Reuters report, Rakesh Jhunjhunwala said that he expects a rebound in corporate earnings in the remainder of the current fiscal year, which ends in March, with early signs already evident in the quarter ended 30 September.
In an interview to CNBC TV18, Krishna Kumar Karwa, Managing Director at Emkay Global Securities said last week, “ Out of the companies under coverage at our end, almost hundred companies have announced their results. There have been target price upgrades on at least 50 companies, which is much more than what was happening in last quarter or few quarters ago. Even on the EPS upgrades, in 40-45 companies have seen them in FY-18 and FY-19. My sense is that the numbers have been better than expected.”
In an interview to ET Now, Leo Puri, Managing Director of UTI Asset Management Company said last week, “In the long-run we have to look for earnings, and earnings recovery, but that remains tepid. There are early signs, but it will take at least 12-18 months for strong earnings recovery.”