Slow Grind Looms for India Stocks as Demand Stalls, Broker Says

(Bloomberg) -- Indian stocks are set for a “slow grind,” with the outlook for domestic demand suggesting earnings growth won’t recover for some time, according to Mumbai-based brokerage Motilal Oswal Financial Services Ltd...“Demand concerns in the economy are now coming to the fore,” Gautam Duggad, an analyst at Motilal Oswal, wrote in a note. Should there be no improvement, it raises “the risk for earnings downgrades in FY21”..Companies delivered better-than-expected earnings for the quarter ended September, with about 70% of Nifty firms with comparable data reporting net income that beat or matched analyst estimates. Without a government cut in the corporate tax rate during the period, earnings were “in line but muted,” according to Duggad..India is contending with the slowest economic growth in six years, and a contraction in consumer demand has hurt sales in industries from automobiles to retail..“We expect more policy action from the government but do not foresee any sharp recovery in demand,” said Duggad..To contact the reporter on this story: Ronojoy Mazumdar in Mumbai at rmazumdar7@bloomberg.net.To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Margo Towie, Ravil Shirodkar.©2019 Bloomberg L.P.

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Slow Grind Looms for India Stocks as Demand Stalls, Broker Says

Bloomberg Quint