The cool off in crude oil prices is a positive surprise but the Achilles’ heel for Indian stocks has been earnings growth, according to Manishi Raychaudhuri, equity strategist (Asia-Pacific) at BNP Paribas.
Raychaudhuri said the second-quarter earnings have been borderline disappointing with fewer companies beating analyst estimates.
“We have seen a reflection of this in the earnings estimates. Over past three months the consensus EPS estimate for both fiscal year 2019 and 2020 have declined by about 7 percent or so— that’s pretty sharp.”
It’s the most important variable the foreign investors are watching, he said, adding it needs to catch up with the developed market peers. Read More