India Equities - The Gridlock Intensifies: Dolat Capital

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Dolat Capital Report.In our earlier note, we had laid three scenarios with varying probabilities that the India and Global Equities were grappling with for CY23. We had assigned the highest probability to a scenario of 'R-I' which means recession with declining inflation. Last couple of months has shown that we live in an age of perfect uncertainty.India inflation data ‘disappointed’ with a reading much higher than the consensus although the post release analysis seems to suggest data inconsistency. Earnings trajectory continues to be tad disappointing with continued margin pressures and muted demand. The earnings growth estimates are now veering towards low double-digit levels and turning out to be increasingly vulnerable. The Monetary Policy Committee will now likely consider another hike in April meeting which was earlier a pause in our base case. With that, the lending rates will be higher than what we believe is the red line for mortgages and durables. Globally too, the headwinds continued to take toll on the sentiments with stronger labor markets in the U.S. leading to higher than expected non-farm payrolls, slowing disinflation, strong retail sales and Purchasing Manager's Index services. The buoyant reaction function of the market seems to have rolled back. The terminal rate for fed fund has moved towards 5.40% (versus earlier expectation of sub 5%). The narrative has clearly solidified towards ‘higher for longer’ and hence the investor sentiment going ‘risk off’. This has led to dollar Index moving higher, corrections in equities and commodities and rise in bond yields..Click on the attachment to read the full report:.Q3 FY23 Results Review - Consumption Slowdown A Worry; Autos Reviving: Motilal Oswal.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

India Equities - The Gridlock Intensifies: Dolat Capital

Earnings trajectory continues to be tad disappointing with continued margin pressures and muted demand.

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