Posted at 1:58 PM , on October 29, 2015
New economy is something hard to define. But we have used some broad highlighters to guide our decision. For starters, sectors that have grown recently will fall under that definition. This includes internet, media, IT and telecom companies. We also include sectors that are catering to niche global segments due to a clear price arbitrage. Pharmaceuticals and to an extent IT fall into this category. Lastly, we have also included companies with a strong intangible franchise which brings in the FMCG stocks also into the new economy mould…
Posted at 1:31 PM , on October 29, 2015
The Q2 season began with both the leading technology companies, TCS and Infosys, giving an earnings growth warning. The message was very clear; IT growth is likely to be constrained by cross currency headwinds and margin compression as clients bargain for better pricing. However, Reliance was a beacon of hope as it managed to report an all-time high gross refining margin (GRM) as well as strong petchem margins. As the Q2 season progresses, it is time to look at how the old economy sectors and stocks are likely to perform.