Markets
BSE See NSE See 39,106.97
146.18 (0.38%)
collapse Related Readings collapse

On A Steady Wicket

| 10/11/2010 3:05 PM Monday

India as an investment destination is getting increasingly attractive. Presently we have been hearing a lot of debate about the P/E of the Indian markets and whether this trading will be sustainable or not.

If we look at the situation closely enough, at this point of time investors have started to look at the FY12 estimates and taking that into consideration, we are trading at a comfortable zone of 17-18x P/E multiples. On FY11 earnings’ estimate we are trading in the 23-24x P/E multiple which is much lesser than the P/E of 28x in 2008. Therefore we cannot say that we are exposed to stretched valuations. Also, our frontline stocks are not undervalued. As mentioned before, we offer a sweet spot thanks to the growth v/s risk relationship and therefore the investors are ready to pay a premium for parking their funds in India.

As of now the next thing that we are looking forward to is the status of the Q2FY11 earnings. We believe that the earnings in this quarter are likely to show better growth as compared to Q1FY11. We are after all quite aware that the earnings’ growth in the first quarter always presents a sluggish picture. In the second quarter we may see a better performance in the IT, automotive, and metal sectors. We also feel that the cement and realty sectors are likely to disappoint us on the earnings’ front.

Going forward, we see the likelihood of many news flows that may act as triggers for the markets. We are really looking forward to the 3G rollout, then we have some policy-related announcements pending on the power sector, and we have the deregulation of the petroleum products in the pipeline. We still believe that we are vulnerable to news flows. For instance, if something negative flows from the USA, we may face a drift downwards. But at present we do not foresee any such event in the near term. Meanwhile, the liquidity is likely to be in a volatile state. In our opinion, the Nifty may end up trading in the range of 5,500-6,500 for the next few months.

Coming to the interest rate scenario, the upward bias is likely to stay a bit calm but we may see it drifting upward in the beginning of the next calendar year which will depend on the credit offtake. This is likely to intensify from October onwards. On the inflationary side we feel that food-related inflation is likely to be tamed a bit as a result of the good monsoon and the possibility of an excellent harvest. In fact, inflation presently continues to be at uncomfortable levels. It is mainly demand-driven and the RBI is well-equipped to treat this concern. On the global front, companies follow the calendar year as their financial year and as such almost three-fourths of this period has passed by so that they will be keener on re-assessing their output during the last quarter while planning for the next one.

 

Find More Articles on: DSIJ Magazine, Broker's Best, Markets, Market Outlook

«« First « Previous |1 2 | Last ››
news letter

More for the early bird.

Get the post-market reports and breakfast news right in your inbox. See latest »

DSIJ Mindshare

12345678910Last

Tiger Logistics topline to grow by 10%--buoyant over infra sector status to logistics sector

Tiger Logistics topline to grow by 10%--buoyant over infra sector status to logistics sector

Logistics sector will play a vital role in making the concept of ‘Make in India’ a success. This will be further aided by some of the recent steps taken by Government of India such as granting of infra sector status to logistics sector.

Best and worst Performing Sector Funds of Year 2017

Best and worst Performing Sector Funds of Year 2017

As the year-end has approached most of you are eager to know the mutual fund movers and shakers of the year 2017. Read on to find the performance of various sector dedicated funds.

Markets may start positive, but volatility likely due to F&O expiry

Markets may start positive, but volatility likely due to F&O expiry

The start of the F&O expiry day is likely to be in the green, but volatility may creep in with the progress of the session. The SGX Nifty suggests that the Nifty could open at 10,525 with gains of 32 points at the opening bell. 

Pidilite announces buyback of Rs 500 crore

Pidilite announces buyback of Rs 500 crore

The buyback offer comprises purchase of up to 50,00,000 equity shares. The buyback offer size comprises 0.975 per cent of the total paid-up equity capital of the company.

Bank Nifty drags markets to close in the red

Bank Nifty drags markets to close in the red

The late session fall in Bank Nifty changed the direction of the market, leading to a marginal fall in the benchmark indices. Bank Nifty yet again resisted at its multiple point downward sloping trendline level at 25733.

Six major underperforming MF schemes having higher expense ratios

Six major underperforming MF schemes having higher expense ratios

Mutual funds with a large size of assets under management (AUMs) are supposed to have lower expense ratios. However, there are schemes with large AUMs but having higher expense ratios and generating lower returns. 

Nifty Pharma supports market; Sun Pharma at bullish reversal

Nifty Pharma supports market; Sun Pharma at bullish reversal

Nifty Pharma index has come in as the healer in an otherwise sluggish market. Index has given a consolidation breakout at the 9420 level today and if the it sustains 9420, followed by 9628 on the upside, it has a long way to go.

Ten stocks close to their 52-week low

Ten stocks close to their 52-week low

Following stocks are close to their 52-week low as at 12.35 p.m. on December 27.

Ten stocks close to their 52-week high

Ten stocks close to their 52-week high

The markets on December 27 opened gap down. BSE Sensex is trading at 34,068.15, up by 57.54 points and the Nifty is trading at 10,539.45, up by 7.95 points.

Five stocks with selling interest

Five stocks with selling interest

Overall volumes in futures & options currently stand at 62.75 lakh contracts with a turnover of Rs. 5,19,204.72 crore.