Stocks: What's preferred, what's not after demonetisation

The Markets have witnessed increased volatility and trended southward in the past three weeks, thanks to demonetisation and a Trump win in the US elections. Most experts believe the former will hamper economic growth and corporate India’s performance  meaningfully in the second half of this financial year. This is also reflected in a host of downgrades of both GDP as well as earnings growth estimates for this financial year. 

In this backdrop, here are 10 stocks which have witnessed highest earnings per share (EPS) downgrades and upgrades after November 8 (see table). Consolidated earnings per share estimates of SCI, Orient Cements and PCJ were downgraded sharply, while that of BHEL, Tata Communications and Indian Bank saw the highest upgrades. 

Moreover, these earnings revisions also factor in fundamental factors such as improving order inflows for BHEL even as rising asset quality pain, particularly of its subsidiaries, have triggered downgrades of SBI’s consolidated earnings. Overall, these revisions are an important indicator of investor sentiment around these stocks.