See downward revision for 2 qtrs over note ban: Amisha Vora

Speaking to CNBC-TV18 Amisha Vora of Prabhudas Lilladher said that demonetisation will lead to downward revision in one or two quarters at least. The critical question is whether global funds will overlook the pain for two quarters? The key question is for one or two quarter how do we migrate to the new normal: the Donald Trump victory. She also spoke about the real estate sector saying that a good part of large metro construction or real estate has been slow. Repayment issues will be there for one or two quarters, she mentioned.Below is the transcript of Amisha Vora’s interview to Prashant Nair and Ekta Batra on CNBC-TV18.Prashant: What we are seeing now, it is kind of difficult to differentiate. How much of this with regards to the demonetisation impact, that I was talking about and how much of this is global in nature because you have pretty sharp moves -- dollar, the US 10-year treasury yield. How much is local, how much is global?A: As what you very rightly said, it is difficult to differentiate, but I would still think that a large part is still global as what you can very evidently see from what has really been happening to a number of other emerging markets and their indices. So, I would still say that today’s move or maybe to that extent yesterday’s move both were globally linked rather than for demonetization. One thing is very clear that demonetization will definitely lead to downward revision of earnings for one minimum or two quarters for sure.The critical question is that whether markets and global funds will overlook that pain of two quarters and see the macro benefits or in the meantime, even globally the volatility is high because of all the known and unknown reasons and markets will succumb. So, the question is for the next one or two quarters, how do we migrate or adjust to the new thing, which is either the new US president or the Fed rate policy or the demonetization gain and otherwise. And beyond that also the adjustment to goods and services tax (GST) by the trade, by the business will also create a bit of uncertainty and we need to wait and watch whether in the process -- though long-term it is very good -- is it going to lead to any hiccups in doing the day to day business. But as far as demonetization is concerned, we all know on a very macro basis, it is positive.Ekta: Are you worried about loans against property (LAP) as a portfolio for a lot of non-banking finance companies (NBFCs) where asset quality concerns could rise as well as real estate companies where maybe two-three quarters down the line because they feel this cash crunch, we could see non-performing assets (NPA) rise from that sector as well for banks.A: I would say that a good part of large metro construction or real estate was any which way slow. The buying in some of these large metros were housing funded, so a good part was in white, but at the same time at land level, there was huge amount of usage of both kinds of money. At the permission level, there huge amount of usage of both kind of money and of course, non-metro, it was easy to use whatever currency you wanted to use. So, I do not think that for the larger companies there is such a big issue, but a number of companies have specific portfolios where they have been lending to the non-metro guys only on a focused way, there could be repayment issues for sure for next two quarters and beyond that if property prices remain sluggish, your cover may come down. Some such issues would arise. But repayment, across on SME level, not much company, which any which way under a little problem and they were managing, will be more.For full discussion, watch accompanying video...