Moneycontrol Pro Panorama: The bigger risk investors need to watch out for   

While the Reserve Bank of India’s reports presented an optimistic outlook for households and industry, private surveys are indicating a mixed picture. An analysis by Centre for Monitoring Indian Economy (CMIE) shows slow improvement in consumer sentiment. In an investor update, FSN E-Commerce Ventures attributed the slowdown in fashion business to a pullback in discretionary spends by consumers. FMCG company updates continue to point to stress visible on the rural demand front.

Automobile sales growth slowed in the March quarter and a private weather forecaster is predicting below normal rains in 2023 monsoon season. “Our dealer surveys indicate that new order inflows at passenger vehicle dealerships have slowed down,” analysts at Nomura said in a note.

The concerns and the turbulence in the global economy have weighed on equity market returns this year — the Nifty 50 index lost 3 percent so far this year. Still, many fear that the market is not fully reflecting the growth slowdown risks. Estimates project better earnings growth in FY24. If the moderation in demand intensifies, then earnings estimates may see a broader reset. That is the bigger risk investors need to watch out for.

"For FY24, consensus is forecasting 20 percent EPS growth (with demand likely to moderate only a little)," Nuvama Institutional Equities said in a note. “We think this could be at risk as demand deterioration is broadening from exports to some segments of domestic consumption.” EPS is earnings per share. The earnings growth projections are for the Nifty index.

Investing insights from our research team Craftsman Automation: Riding the CV momentum, higher aluminium use in auto sector GM Breweries: Sunny growth prospects at an attractive valuation What does revised gas pricing mean for the CGD sector?

Tracker

Pro Economic Tracker | Bank credit growth skids

What else are we reading?

Global sugar price spike may mean little for India’s sugar mills Are small tweaks enough for BSE to improve market share? The fixed income party’s not over, only the venue has shifted Green Pivot | Can Musk magic break the climate curse? Housing sector gets a rate hike breather, but uncertainties loom Mohamed El-Erian: Banking tremors leave a legacy of credit contraction (republished from the FT) Karnataka Elections: How dynastic politics killed a promising regional party Ashok Gehlot could win this round too against a snubbed Sachin Pilot and lose Rajasthan for Congress to BJP Geoeconomics, geopolitics have worsened the economic outlook OPEC output cut: Outlook depends on geopolitical scenario India's heatwave problem getting worse is a warning to cut down on fossil fuel consumption The global EV transition hinges on one Chinese company Intel’s foundry bet may split the market in three

Technical Picks: Redington, Tata Chemicals, TCS and Zinc (These are published every trading day before markets open and can be read on the app)

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R Sree Ram
Moneycontrol Pro