Market is factoring in a 26% earnings CAGR over FY21-23: Nomura

Besides strong corporate earnings, the current rally in the equity markets is also supported by benign macros, Nomura said, with a very supportive monetary policy

The market is factoring in a 26 per cent compounded earnings growth (CAGR) in earnings between fiscal 2020-21 and 2022-23 (FY21-23), suggests a recent report by Nomura, with banks, autos, metals, oil and gas, and information technology (IT) services being the key contributors to incremental earnings over the period. On the other hand, there are potential risks to current estimates for consumer, telecom and financials, which could lead to a 5-10 per cent cut in FY23 earnings estimates, it said.

“Even considering a 10 per cent cut, it would imply a CAGR of 19 per cent over FY21-23, higher than the