Moneycontrol
Oct 18, 2016 09:32 AM IST | Source: CNBC-TV18

Earnings to trail economic growth, buy consumption: Goldman

Nupur Gupta of Goldman Sachs thinks the divergence between equity earnings and economic growth should not necessarily be taken as evidence against a pick-up in growth, but rather as a function of measurement and composition differences.


Nupur Gupta of Goldman Sachs thinks the divergence between equity earnings and economic growth should not necessarily be taken as evidence against a pick-up in growth, but rather as a function of measurement and composition differences.


"Looking forward, our strategists expect corporate earnings growth to recover in FY17 and outpace its regional peers," he says.


That said, he thinks that the under-representation of agriculture and elevated credit costs for public sector banks may continue to cause earnings growth to trail real economic growth in the near term.

To benefit from potential swings in underlying economic growth, his strategy team recommends buying consumption and government capex beneficiaries, Gupta says.

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