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Nifty Hits a New High But Watch The (Lack of) Earnings Growth

The Nifty hit an all time high today. The highest it’s ever been and by all indicators, very very bullish.

Nifty Hits a New High But Watch The (Lack of) Earnings Growth

But what’s not good is the fact that this “euphoria” is probably short lived.

If you’re a regular reader, you’d have read our analysis that Nifty companies announced a shockingly low 5% growth on net profit in the September 2014 quarter.

 

The December quarter has only seen 9 company results so far (who are in the Nifty). These results aren’t exactly very exciting:

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Look carefully, and you’ll see the big movers are banks (on year on year profit growth). Axis, Indusind and Kotak produce net profit growth of more than 18%.

Hindustan Unilever shows a reasonable 18% profit growth.

Infotech stocks are subdued with Infy showing 13% growth, but Wipro at 8.7% disappoints. And TCS is plain shocking at -0.1%.

The worst of the lot are the real economy giants – Reliance and Bajaj Auto, which dropped profits more than 4%.

These are early days, but watch this space; we’ll post updates as more results pour in. While many midcaps have shown good results, the first nine are just not exciting enough. Markets went up in May to July assuming the best was ahead of us – and the next two quarters have been astoundingly abysmal.

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