FY13 earnings growth can top 14% at best, 9% at least: MOSt

At the index level, he sees an earnings growth of about 5-6% in FY12 and 13-14% in FY13. "I think it’s fair to assume that FY13 numbers will get moderated more closer to 9-10% growth," he asserts.

Also read: See uncertainty in May, be stock specific, says Richard Ross

Below is the edited transcript of his interview with CNBC-TV18's Mitali Mukherjee and Sonia Shenoy. Also watch the accompanying video.

Q: About halfway through earning season, what has your prognosis been, more hits than misses or largely along expected lines?

A: I think the important highlight of the earning season has been that the estimates had got moderated significantly before the number season began. Barring a couple of big numbers, which have seen some misses, likes of Infosys or Wipro , broadly the aggregate numbers looks quite okay.

Infact, at the broader level, there are more number of companies that are either meeting or beating expectations. So, numbers have been fairly okay till now. That’s partly to do because the expectations have got toned down a lot over the last couple of quarters.

Q: When we see the April auto sales numbers, there are perceptible signs of a slowdown. Any tactical changes you would make to stocks like Tata Motors , Maruti or even M&M in someone's portfolio?

A: As far as the auto volumes are concerned, I think the big surprise came from Tata Motors. If you look at M&M, the tractor volumes have been sliding now over the last four-five months. That's a stock where generally people have been lying low for quite some time.

Maruti, after the fabulous run from January till now, needs some breather. So, I won't be too much worried, maybe another 5-7% correction and you will start seeing things again looking good for Maruti as a stock.

Tata Motors, the domestic volumes were definitely very surprisingly negative, but more importantly this stock is more a story of Jaguar-Land Rover (JLR). Till the time you see the momentum being strong in JLR, I don't think you will see any correction into the stock. But, at some point of time in this year, the domestic volumes need to recover for them to offset, whenever the base of JLR starts running off.

Q: Are you guys working with a year-end target for the market? What would the underlying assumption be then in terms of earnings growth?

A: This year, for FY12, we think we will end with an earnings growth of about 5-6% at the index level. Next year, while our estimates currently run at 13-14%, I think it's fair to assume that these numbers will get moderated more closer to 9-10% growth.

At a 10% earnings growth in FY13, today we are trading at 14 times. Considering the macroeconomic uncertainties, 14% is perhaps the best multiple that you can think about to trade for sometime.