Markets nudge higher but fund managers have task cut out in assessing firms

'Disconnect between market and macro reality' makes all estimates about companies a risky business, say analysts.

Equity fund managers may have less to cheer even though Indian equities have staged a sharp comeback since their March lows. Market polarisation, uncertainty created by the pandemic, and a liquidity-driven rally have made their task of managing money more difficult.

Analysts and fund managers seem to have discounted the FY21 earnings entirely, and are betting on stocks based on the projected FY22 and FY23 numbers.

Consensus estimates peg the Nifty’s earnings per share (EPS) growth at 10 per cent and 39 per cent for FY21 and FY22, respectively, according to Credit Suisse Wealth Management, India. Local lockdowns, a surge in Covid-19