NEW DELHI, Aug. 23 -- The mood on the Street is pessimistic. After June quarter results, earnings estimates of a large number of companies continue to be downgraded. In a report dated 16 August, CLSA said, "Numbers were cut for 54% of the stocks, despite only 36% of them missing estimates." The reason for this is that the broker adjusted numbers to account for the slowing economy as well.
Forecasts by others also echo the weakness in performance. Analysts at Kotak Institutional Equities started the year with an estimate of 24% growth in earnings of Nifty 50 firms. After the first quarter results, earnings growth estimates have been cut to 15%.
Worse still, with the economy engulfed in a spell of gloom, companies have begun cutting capital...