Despite various brokerages cutting down their earnings estimate for fiscal 2019, Krishna Kumar Karwa of Emkay Global Financial Services is hopeful of earnings picking momentum in fiscal 2019.
Karwa, managing director at Emkay Global, said he is not surprised by brokerages cutting down their earnings estimate for fiscal 2019 because the expectations were high.
Globally too commodity prices have hardened which could put pressure on margins, he said. All this makes a case for tempering down earnings estimates.
With regards to the fourth quarter earnings, Karwa said the results of most of the largecap companies across segments were as expected. The disappointment basically came from the small companies where expectation were high, he added.
Going forward he is optimistic of fiscal 2019 earnings being around 18-20 percent on the back of good monsoons= and an improvement in GST collections.
With regards to midcaps and smallcaps, he said long term investors can look at an opportunity to systematically invest in them.
Talking about IT stocks, he said as far as valuations are concerned most of the IT companies have reached fair value in terms of earnings vis-a-vis growth. The right time to buy them was 6-8 months ago and 30-40 percent returns have already been made in most stocks. Now, for the kind of growth these companies are going to show, the current valuations are rich.