Investors brace themselves as India's markets head towards bear territory.
As Hindustan Unilever Ltd (HUL) prepared to report earnings on October 15 there was every expectation that India’s largest consumer goods company would present a stellar set. Nearly four years of low consumer price inflation had put more money in the hands of Indian consumers. The company had benefited from benign commodity prices and a cut in tax rates. Urban consumers had uptraded to more expensive varieties of toothpastes, soaps and detergents while their rural counterparts had entered the consuming class.
The results, announced after market hours, clearly met expectations. Volumes had grown 10 percent while profitability rose 12 percent. What didn’t meet expectations was the stock reaction. The next trading day the stock closed down 2.2 percent, shaving $1 billion (7,400 crore) of fits $45 billion market cap. The benchmark Sensex ended the day up 0.7 percent. Clearly, the market wasn’t willing to add a higher price for future consistent growth.
In many ways the market’s reaction to HUL’s results was an apt summary of its travails over the last six months. Increasingly, improved performance has not translated into higher multiples for future growth—a classic sign that signals the advent of a bear market. As investors become more cautious, it is important to remember that this comes at a time when on aggregate Indian companies are on track to post improved earnings over the next year. A 13 percent depreciation in the Indian rupee has not resulted in any repricing of the prospects of Indian exporters save for information technology companies. And spare a thought for those who’ve missed their earnings. They have been put in the doghouse with valuations cut by 40-60 percent.
هذه القصة مأخوذة من طبعة November 9, 2018 من Forbes India.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة November 9, 2018 من Forbes India.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
Home-Cooked Meal Is Now Greatly Valued
The pandemic has also brought with it an improved focus on hygiene, use of technology in dining, rise of cloud kitchens and resurgence in popularity of Indian ingredients
Paytm 3.0 - Reaching Near Breakeven In Two Years
As of 2020, Vijay Shekhar Sharma’s super app for financial services had run up losses in thousands of crores. Now, as digital payments gets yet another boost courtesy Covid-19, he’s hopeful of reaching near breakeven in two years
THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN
Covid-19 has shown that women are more likely to face the brunt of job losses than men, and find fewer opportunities when they want to resume. That apart, several have to deal with increased hours of unpaid work at home and even domestic abuse
LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE
Leaders must not only guard their teams first during a crisis, but also deal with stakeholders with respect and dignity. And apart from pursuing business goals, they should remain committed to our planet and the environment
PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST
Apart from building a flexible and resilient framework for the future, philanthropists, civil society and the government must work in tandem so that every rupee is absorbed on the ground
INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR
While clinical research will get a boost, having a skilled workforce and public spending on health care will be challenges in the near term
DIGITALISATION WILL HELP IN VALUE CREATION
As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India
Industry 4.0: Climate Revolution?
Augmenting sustainability alongside digital capabilities is an economic, competitive and global opportunity for India’s businesses, but regulations need to reflect intent
EV Dream Still Miles Away
Electric vehicles have remained a buzzword in India for years. But not much has moved on ground due to high upfront costs, range anxiety and charging infrastructure
Living Waters
A virus has caused us to scramble for oxygen but our chokehold on the environment is slowly strangling the very waters that breathe life into us. The virus is a timely reminder: We are merely consumers, not producers of life’s breath on this planet