Future earnings growth to normalize further as expectations are still high.
We have two big voices – MAT and US rate hike which are well discussed points with risk of over-imagination. They may have their own place but we believe earnings trajectory and direction of government is more important.
Coming to earnings, Sensex EPS has come down marginally only by 2% during the last month. The risk is outlook for FY16E continues to be high at 19%-20% growth. But this trend should be finalized over the Q4 and budget session ending May 13th, which will decide this extend of consolidation.
By Vinod Nair, Head – Fundamental Research, Geojit BNP Paribas