Hold on to equities, look for a rebound
In a recent report Kotak Securities also kept to the view that there are no signs of upgrade right now. The Kotak report slashed the earnings forecast for 2012-13 from 7.5 per cent at the start of Q2 FY'13 to 5.8 per cent now. "2Q FY'13 results provided no evidence of earnings upgrade. Net profits beat our estimates but largely due to higher other income in few cases and a large one off item in case of NTPC," said a report by Sanjeev Prasad of Kotak Securities.
The weakness in the corporate performance is also reflected in the revenue and profit expansion of the BSE 100 companies (excluding IOCL, BPCL and HPCL) over the last seven quarters. In the 21 month period, the net sales of these companies have grown by 33 per cent from Rs 4,03,006 crore in the quarter ended December 2010 to Rs 5,35,728
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