Quote on market by Krishna Appala, Sr. Research Analyst, Capitalmind Research
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Below the Quote on market by Krishna Appala, Sr. Research Analyst, Capitalmind Research
Nifty’s Sluggish Q1 Earnings Update: Pharma Shines Amidst Market Concerns
“As we reach the halfway point of Q1, earnings growth for Nifty companies appears sluggish. The Nifty index recently touched the 25,000 mark but paused a bit, closing down by 0.8%. So far, 30 out of the 50 Nifty companies have reported their Q1 earnings, showing a median sales growth of 10.7% YoY, while overall profits rose by 8% YoY. This tepid earnings growth, if echoed by the remaining companies, could impact the broader market, especially as the Nifty is already trading at a PE of 23 times on a TTM basis.
With global markets leaning towards a risk-off scenario, as evidenced by sharp sell-offs in the Nasdaq and Nikkei this week, it’s crucial for earnings to accelerate. If earnings growth doesn’t pick up, the market may face a risk of near-term consolidation. On a sectoral level, the pharma industry stands out, with CNX Pharma reaching an all-time high and closing up 1.6% this week. With its favorable valuations and the fact that it has been overlooked in recent years, the pharma sector could present a promising investment opportunity in the near term.”
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