Nifty Transitions From An Era Of ‘Earnings Mirage’ To ‘Earnings Growth’: ICICI Securities
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ICICI Securities Report
Nifty 50 trailing earnings per share for December 2019 (pre-Covid-19) stood at approximately 475 compared to the earnings five years prior of ~435 during Dec-2014.
However, in Dec-2014, the street expected the Nifty 50 index to compound earnings at a compound annual growth rate of ~21% over the next two years to ~611.
As time rolled forward, the trailing and the forward earnings stagnated as earnings kept disappointing due to volatile earnings of cyclicals and a few defensives such as telecom and pharma, thereby, resulting in downgrades.
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