After record rally this year, earnings test for the market optimism

Sample this: In June 2022, the aggregate profit pool for the top 600 companies was projected to touch Rs. 13.2 trillion for the ongoing financial year 2023-24 (FY24)

The sharp rally in the markets this year has come on the back of price-to-earnings (P/E) expansion even as analysts have scaled back the growth projections. Sample this: In June 2022, the aggregate profit pool for top 600 companies was projected to touch Rs 13.2 trillion for the ongoing financial year 2023-24 (FY24). 

A year ago, the combined market capitalisation (m-cap) of these companies was Rs 216 trillion, which has now grown to Rs 275 trillion. 

However, the earnings estimates have been downgraded by 4 per cent. This is due to lowering of earnings estimates for Reliance and companies in the metals,