Quality Of Q4 Earnings Beat Not That Great, Says Sanjeev Prasad Of Kotak Institutional Equities
Banking could possibly see some positive surprises, signal very confusing for IT, says Prasad.
The macro situation in rural India is a lot better compared to what it was three to six months ago, according to Kotak Institutional Equities' Sanjeev Prasad.
"On the part of the current account deficit and balance of payments, India has improved a lot, as there is a decline in the oil prices," Prasad, managing director and co-head at Kotak, told BQ Prime's Sajeet Manghat.
Jobs in rural India are on a par with pre-Covid levels, and this would hopefully help consumer stable volume recover in the coming months, Prasad said. Given the combination of job recovery and income recovery, the economy will start seeing consumption pickup, he said.
"However, the only worry here is the monsoon, and if there is a really bad monsoon season, then the rural recovery will be derailed," Prasad said.
Index Earnings And Information & Technology Sector
Though companies reported better results in the fourth quarter, the quality of 'beat was not that great', according to Prasad. The index earnings in FY24 are going to be a combination of recovering volumes and profitability, he said.
"The banking sector could possibly see some positive surprises and witness possible upside," he said. In the IT sector, investors are not sure how to approach the situation given that the U.S. economy is slowing very gradually, Prasad said.
"The signal is very confusing for IT, the customers do not know how to respond to this kind of environment", Prasad added.