Aug 04, 2010, 01.55 PM | Source: CNBC-TV18
Motilal Oswal AMC does not see big downsides for markets from these levels, said Nitin Rakesh, its CEO, in an exclusive interview to CNBC-TV18.
He sees cautiousness in the pace of move. "There will be a lot more sector- specific, stock-specific action till things pan out. Maybe we will see another quarter worth of numbers. Till then, the best case scenario really is that we will stay in this zone."
In an exclusive interview with CNBC-TV18, Nitin Rakesh, CEO, Motilal Oswal, spoke about his reading of the market and his outlook.
Below is a verbatim transcript. Also see the accompanying video
Q: Earning season is almost done, at the end of it are you feeling table thumping bullish or has some of your optimism been restrained?
A: I think to some extent the earnings have been a little touched below expectations primarily on account of lower margins while the topline growth has been fairly inline. To that extent there is a touch disappointment on total profit after tax numbers that we are seeing at an aggregate level ending up somewhere around 17-18% versus more than 20% that the street was expecting. So the valuation overhang seems to have taken over once again given the fact that there wasnít any big surprise from the earnings momentum and combined that with the stubbornly high hasnít buzzed at all from the 9-10% mark, I think there is a bit of a cautious optimism much more than what you would have expected at this point in time give that till June 30th we were probably the best performing market globally and we have seen some of their outperformance kind of go away in the last 30 days. So at this point its cautious optimism not so much table thumping as you put it.
Q: What will that tantamount to that the market will continue to grind in a bit of range this month or that because of this earnings aggression we had we may loose a bit of ground?
A: I think the downside still stays fairly limited primarily because the growth momentum is very strong. If you see auto sales, if you see banking numbers obviously the underlying strength in the economy continues to be very strong. So I donít think there is a big downside from these levels that we can worry about. I think the only cautiousness that will come in will be primarily in the pace of move. And I think it will be lot more sectors specific, stock specific till things pan out and maybe we see another quarter worth of numbers. See how the monsoon normalcy trickles into numbers for corporate India and I think at that point of time we will probably take stock again. Till then the best case scenario really is that we stay in this zone.
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Nitin Rakesh, managing director and CEO of Motilal