Most of the people in the market have been skeptical about earnings growth continuing in FY09. The company’s earning direction says that earning growth could well be continuing and that is the confidence I see in the market at this point of time, which is getting reflected into prices.
the confidence is reviving back. So, put together we are seeing the market coming back to a kind of a respectable level from a de-rated performance to a re-rating.
The important aspect is earning and most importantly the confidence of the investors. If this particular quarter shows the performance continuing and auto numbers are just a reflection of it, the numbers in month of April are suggesting that growth is going to continue. So, such kind of upsides in some sectors would probably mean that growth in the market will be continuing and there may be profit booking at some levels.
look at the April numbers and then take a call. According to me, the April number is largely out of two reasons: one is the excise cut and the impact on the prices. Most of the dealers and consumers got wind of the announcement that some companies may be increasing the prices of autos. So, to a greater extent, even the rate of interest is not coming down. Most of the consumers have taken the decision in favour of buyingwe will have to wait and see whether in the month of May and June this kind of growth sustains. If it does sustain, then auto would be a clear buy. But one would look at the valuation first before one would like to get into.
The result season clearly has shown up no surprises. I think it has been in-line with what one has expected. There is some sense of a slowdown; there is some sense that earnings numbers as expected have reflected the slowdown in the economy with interest rates having hardened. Since then, there would be some more slowdown
Telecom was a bit of a positive surprise but I guess it was expected that the telecom will do well. It would be the bright spot in this period. So I would say that there were not any significant surprises as far as we are concerned and our sense is that, that trend of no surprises will continue in the future.
