‘Corporate ethics was always at the forefront of valuation’
Will this reflect in valuations?
This is the first time people will know the meaning of good conduct. Corporate ethics was always at the forefront of giving valuation to companies but now since the companies are getting exposed, people will classify them into low PE category. The premium to goodness will go higher and so will the discount for badness, thereby increasing the valuation gap.
What do the companies need to do?
The way to change is to change from within — you will have to take tough decisions, have to forego some greedy benefits, pay more taxes, take care of minority shareholders and have to come out clean. Some will reform while other will just go down.
How do you see markets now?
The earnings season is better and has been a mixed bag. I think rupee will play an important role, if the government does not act, the rupee will slip. It is the invisible headmaster as we are now much more globally connected, even the government cannot act. Government currently is in such a situation where they are not able to honour their own words
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