Expect 20% earnings growth this quarter; will continue to drive markets: Ashish Gupta

economictimes.indiatimes.com:

Ashish Gupta, CIO, Axis Mutual Fund, says “both capex and real estate are sectors that are emerging after multi-years of down cycle. And therefore, the ROE recovery in many of these companies is very, very sharp. Some of this is priced in. I think some of this still has to play out. And we are actually still positive on this theme.”

The script of how markets moved in 2023 was a function of liquidity, topping out of inflation and how the earning cycle picked up. What do you think will influence the script of 2024?
Ashish Gupta: Firstly, a couple of big headwinds that were there at the start of last year are actually tailwinds for the market. So, whether we look at flows last year which were expected to be impacted by the rise in global rates, I think that has turned on its head. Similarly, commodity prices, in particular oil prices, were elevated and with increasing geopolitical risk that was a concern for the market and I think that also has turned into a big tailwind.
While these tailwinds are there, some of the factors that drove the market last year are still very much present. We expect the Indian earnings trajectory to remain fairly robust. Even this quarter, we are expecting close to 20% earnings growth to be reported by corporate India and I think this will continue to be the primary driver of the markets.

Unlock Leadership Excellence with a Range of CXO Courses

While the economy will do well, earnings will grow. How much of the good news is in the price? They always say markets look forward. Are markets really looking