Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Stocks

Nifty EPS at 241, but losing steam: Slowdown.

More results today: (All notes are EPS growth)

  • Unitech up 15.7%. I expected more. Is this real estate slowing down?
  • Tatamotors down 33%.
  • Tata Comm (VSNL) down 5%. Uhem.
  • Powergrid down 34%. Whoa.
  • ITC down 5.2%.
  • M&M up 1%. Wow.
  • PNB up 20%. A pleasant surprise.

And Suzlon, which is supposed to have declared today, has vanished. No results. How bad can the news be?

Well, the Nifty EPS is now officially 241. With nearly 89% worth of results declared and Suzlon looking dangerously unprofitable, where will the growth come from? Note that even if we scale it to 245 we are BARELY scraping through a 12% year on year growth.

And this is before inflation hits these companies (it has at least a one quarter lag), and before the new interest rates hit them. Now next month, Dr. Reddy will give way to Mr. Reliance Power on the Nifty – which means they will replace a profitable company with one that will make negligible money for the next few years. So no EPS from RPL and no EPS from RPower also. Soon we’re going to be happy to see the Nifty not change EPS at all.

Slowdown anyone?

  • Siddharth says:

    >Deepak,
    Thanks for the updates.
    IMHO and limited knowledge SLOWDOWN.

    Is needed for basic infrastructure to catch up.

    Aggressive approach from RBI to tackle inflation, well not out of proactive good will towards common person, but must be strong push from the politicians which would do its act in time as you have said in previous post.

    btw I learnt some new things. Inflation is not increase in prices, rather its a deliberate monetary policy which in turn is too much supply of money in the market. This is in context of the link http://www.chrismartenson.com/crashcourse
    Good presentation to understand how money is created in USA and how the Japan and China have bought bonds. Good knowledge.

    What I am interpreting is that for the USA GDP to be inline with forecasts, there should be MORE debts and MORE of it so there will be more money?
    I know this may may not directly affect emerging market e.g India.

    The presentation said China had some 30% savings rate whereas USA has 10% or less. Dont know how much savings rate is in India. But wonder if the curent generation like me are much into savings or not, at least for me never did. credit generation??
    So a slowdown should act as a eyeopener/pinch for the one’s who are taking casual approach towards financial future like I used to.

    Just my stupid opinion.

  • Anonymous says:

    >Deepak,

    If you don’t mind, can upload your working of Nifty EPS calculation for Q1FY09.

    Thanks
    Cheers
    GJ

  • Deepak Shenoy says:

    >Siddharth: Thanks – all valid points.

    GJ: GO to the nseindia.com page, look for the Nifty watch page. They have P/E there and last value, divide last value of nifty by P/E to get EPS.

  • Anonymous says:

    >In other news:
    After reading http://blog.investraction.com/2008/05/reliance-power-parks-some-money-in.html the board of directors of Reliance Power has approved the change of the company’s name to Reliance Investment Corporation, and is set to seek shareholders approval for the proposal.
    According to a release issued to the BSE today, the new name, Reliance Investment Corporation, will adequately reflect the current nature of the businesses in the company fold and in line with the company’s vision.

  • Anonymous says:

    >I have been doing that for almost 3 years now. My request was to check the EPS so derived with your calculation.

    I have been following your blog for the last few months. Keep up the good work!

    Cheers
    GJ