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See cut in Nifty50 earnings growth by at least 5-7% for FY23 on supply chain issues, says Aishvarya Dadheech of Ambit Asset Management

We believe the risk of Covid is largely factored in by the market. Lockdown fears in China are impacting the global supply chain and deteriorating the smooth functioning of trade.

April 29, 2022 / 06:11 PM IST

“The market is basically factoring in major parts of the perceived risk of rising inflation, interest rate hike and moderation in earnings growth. Many quality businesses are now available at a favourable risk reward, and long-term investors should capitalise on it,” Aishvarya Dadheech, fund manager at Ambit Asset Management, said in an interview to Moneycontrol.

On the earnings front, he expects the trend of margin contraction to continue for the next few quarters.

With China imposing lockdowns, supply chain issues are exacerbating and fuelling a further surge in commodities prices. “Overall, we see cuts in earnings growth of Nifty50 by at least 5-7 percent for FY23 on account of this factor alone,” said Dadheech. Edited excerpts:

Like other analysts, do you also think this is not a great year for the equity market?