The better-than-expected earnings season is over, and according to Nischal Maheshwari, Edelweiss Financial Services, cost-cutting across the board led to profitability beating the street estimates in most of the sectors. Rupee depreciation also reflected in the profitability for several companies. He believes the fear of further earnings downgrade is receding for the remaining part of the year.
“I do not see much earnings downgrade happening in the next two quarters for FY14, but in FY15, I still believe that the consensus number is pretty aggressive as yet. So there some cutting should be happening,” he adds.
Maheshwari believes the market is fairly valued given the kind of growth it is doing and the levels of Return on Equity (RoE) it holds. However, he does not see much scope for the market to improve, as far as fundamentals are concerned. For markets to now breakout into a new zone there has to be some big trigger and that could be the result of the December 8 elections or the outcome of April elections as more and more certainty happens around there. People will start discounting for FY15 numbers, he adds.
Maheshwari, meanwhile, maintains his consensus for the market and does not see it exceeding.
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