Truth prevails is an old adage that seems to be losing its relevance in the current sentiments.
Still I am confident that "Truth shall prevail". Hopefully, sooner than later.
The case in point is the investor confidence in the stock market. Indian markets are aping the performance of the stock markets of developed world. In fact, the possible loss in indices is reasonably predictable in the last few weeks based on what happened on the previous day in Europe and US.
Are the situations similar? Are Indian businesses facing the same situation as companies in western world? Are Indian corporate giants going bust like crackers in Diwali? Have companies of great repute and history in India have filed for bankruptcy? Has any company in India reported loss of sales (top line) in double digits and evaporation of profits?
Slowdown yes.
How bad is India? Is it comparable to West?
It has baffled me as to how convenient has it been to be infected with "western sentiments" virus without realising that there is a natural immunity we "have".
To the left brain dominated ones-
Indian commercial vehicles sales are in dumps. Tata Motors and Ashok Leyland have reduced production, shut factories for a few days and stocks are beaten beyond imagination.
How does it compare to some global players?
Volvo AS is second largest manufacturer of heavy trucks. They produced nearly 42,000 trucks in Q3 of 2007.
Q4 2008 production
guess
guess
keep guessing
and the last guess
155
Now assess how bad is India and why should we link Indian mindset to a western one in sentiments.....
Still I am confident that "Truth shall prevail". Hopefully, sooner than later.
The case in point is the investor confidence in the stock market. Indian markets are aping the performance of the stock markets of developed world. In fact, the possible loss in indices is reasonably predictable in the last few weeks based on what happened on the previous day in Europe and US.
Are the situations similar? Are Indian businesses facing the same situation as companies in western world? Are Indian corporate giants going bust like crackers in Diwali? Have companies of great repute and history in India have filed for bankruptcy? Has any company in India reported loss of sales (top line) in double digits and evaporation of profits?
Slowdown yes.
How bad is India? Is it comparable to West?
It has baffled me as to how convenient has it been to be infected with "western sentiments" virus without realising that there is a natural immunity we "have".
To the left brain dominated ones-
Indian commercial vehicles sales are in dumps. Tata Motors and Ashok Leyland have reduced production, shut factories for a few days and stocks are beaten beyond imagination.
How does it compare to some global players?
Volvo AS is second largest manufacturer of heavy trucks. They produced nearly 42,000 trucks in Q3 of 2007.
Q4 2008 production
guess
guess
keep guessing
and the last guess
155
Now assess how bad is India and why should we link Indian mindset to a western one in sentiments.....
Market possibly considers future earnig potential and not really the past incidents which in any case have been discunted.
ReplyDeleteIndia, where service plays a dominant role in GDP and within service sector IT & ITes are quite apprehensive of a severe slow down, where the forex reserve is depleting with FII outflow coupled with wider trade deficit on a continuous basis,where consumers are ruthlessly cutting down avoidable expenses taking a cue from their employers putting the overall economy into a downward spiral,is only validating the fact it's no more de-coupled with global economy.
You are correct Alakto. The only point of difference is the intensity of actions and the extent of impact on future is different in India so coupling with rest of world is not on a 1:1 scale.
ReplyDeleteIndian companies are smart enough to understand the constraints of a slowing economy. In our group, as in others too, strict and stringent measures are being put in place to safeguard at least the bottom lines. The markets just over react.
ReplyDeleteOne also has to consider that the levels that the market reached were unrealistic. For a casual observer like me, it was not sustainable. I say this because the basics remained same or moderately improved but the valuations went up exponentially.