The India's Corporate sector had 7% share in India's GDP in terms of profits. This share is now below 5% of India's GDP. This indicates that the corporate profits would surge as percentage of GDP and naturally this will see bullish markets in times to come. When we look at Sensex EPS, we find that it peaked in FY08 at around 833 and now almost two years have passed since then. We have known that the Sensex EPS was almost static during 1996 to 2003 at between 220 to 290 and so was the market barring the aberration created by Ketan Parekh in 1999-2000. We have had our required time in adjusting to world's economic disorder of recent past. The Sensex EPS is now bound to be up considerably (by 25% or more).
The markets can not remain low in light of this. There has been a sea change in the way Indian economy now works. Those born in the beginning year of the reforms are now ready to be active contributors to economic growth of the country. We have seen many impediments removed from our path to progress. The China's progress on economic front as reinforced belief in the big nations' capability to keep marching ahead at high speed once the momentum has been gained. If dragon could move its bulk speedily, the elephant also will do the same and in style and with its beautiful gait.
Hari Om,
Krsna Khandelwal
BIRDINFO Stock Rx - A prescription for stock market
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