The global outlook remains abnormally uncertain but India better positioned
They have mentioned in their report that their team of economists has lowered the global growth forecast, raised the inflation expectation, and embedded higher monetary tightening going ahead. The team highlighted that recessionary fears present a weaker backdrop for global risk assets and that the global outlook remains abnormally uncertain. But they also mentioned that India was slightly better positioned but was not immune to global issues. India’s inflation is lower compared to developed economies due to the composition of the CPI index. Plus, raw material costs have also cooled, which they think should ease the trade deficit, and another normal monsoon should keep food inflation in check.
Further in their report, they mentioned that Nifty FY23E/FY24E consensus EPS was lowered by 4%/2% through the earnings season. The report also further mentioned that Nifty earnings have ended lower than the consensus forecast for every year in the last decade. For FY23, consensus expects overall earnings growth of 12.6% y-y, with the bulk of the share coming from financials (6.9%), energy (4.1%), and consumer discretionary (3.9%).
Remain cautious with a bias for growth at reasonable price