The combined profit before tax of 748 companies, which have declared their results for Q1FY21, is down 46 per cent YoY. Their net sales went down by a quarter as the Covid-19 lockdown led to a sharp fall in economic activity.
The current valuation is 38 per cent higher than the 10-year average of 22x and over 50 per cent higher than the 20-year average of around 20x.
Many weekly indicators turn positive as economy prepares for Unlock 3.0.
Mumbai traffic, mobile internet speeds, and grocery and pharmacy visits are all showing lower numbers for the latest week.
Among the lot, Rallis India, Escorts, Jubilant Life Sciences, and Crisil added half of the total gains made in the ace stock-picker's portfolio.
In three of the past four years, 10-year returns have been 10 per cent or lower, making equity unattractive, compared to other asset classes.
The combined weight of IT companies in the benchmark Nifty 50 index is now at a five-year high of 15 per cent as these companies continue to outperform the broader market.
Equity investors should thank cash-rich biggies such as TCS, ITC, HUL, Nestl, and Bajaj Auto for this.
Together, the top 10 business groups reported a pre-tax loss of Rs 19,342 crore during the January-March 2020 quarter, as against a profit before tax of around Rs 48,500 crore in the year-ago period and Rs 39,600 crore during the December quarter. While Vedanta was the worst hit. others included Aditya Birla, Bharti, Adani, Mahindra, and Tata.
Though India was under lockdown for only seven days of the quarter, global demand and commodity prices began falling from February as COVID-19 was spreading in other countries. 1,002 listed companies - excluding banks, non-bank lenders, insurers, brokerages, and IT firms - reported a combined pre-tax loss of around Rs 2,700 crore during Q4.
In the last five years, imports from HK have more than tripled -- from $5.6 billion in FY15 to $17.1 billion in FY20. In the same period, exports declined by 20 per cent -- from $13.6 billion in FY15 to $10.8 billion (annualised) in FY20.
The first spending item on the chopping block is capital expenditure, followed by operating costs and overheads, including sales and marketing expenses.
While freight traffic has gone up, the Google location data shows more people are stepping out of their homes.
Experts say, investors will be better off exiting them at higher levels and investing in stocks of fundamentally sound companies.
The trend in corporate earnings suggests that index earnings could fall to the levels last seen in early 2014.
Combined profit before tax of 81 firms down 37.5% y-o-y, worst show in at least 3 years.
Currently, the investor and his family's net worth in listed firms stands at Rs 8,517 crore, compared to Rs 8,388 crore as of March 31, 2020.
RIL, however, remains miles ahead of TCS in other financial parameters such as total revenue, operating profit, net worth, assets, and market capitalisation.
The S&P BSE Small-cap index has recovered 26 per cent as compared to a 23 per cent rise in the S&P BSE Sensex.
Corporate revenues will decline for a third consecutive quarter in March on a YoY basis - one of the worst shows by these companies in many years.
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