From EPS to vote share

With the Q4 results coinciding with elections, market could throw up buying opportunities

While the Reserve Bank of India’s (RBI’s) attitude was dovish at last week’s monetary policy review, the policy statement had quite a few negative takeaways. There’s a global slowdown and this will mean some sort of domestic slowdown. The RBI also noted that there is a manufacturing slowdown and that core inflation (ex-food, ex-fuel) is rising.  

The central bank has cut Gross Domestic Product (GDP) estimates by 20 basis points, though the current estimates are still much higher than high-speed indicators, tax collections, etc., seem to warrant. Unless there’s a sudden pickup in business activity, perhaps driven by unrestrained election spending,