Sanjeev Prasad, a top expert from Kotak Institutional Equities, believes that the stock market hasn’t really corrected itself, despite recent drops. He notes that many stocks are currently priced fairly high, with not much chance of significant increase. For many companies, their market price is about four times their actual book value, meaning they might be overpriced. Prasad explains that while some shares have gone down in price, the overall market is still making things complicated due to companies with unclear values, especially in sectors like consumer goods, cars, and construction.
Some industries, like hotels, are doing well, while others are struggling. For example, hospitality companies are seeing strong occupancy rates, but sales in food delivery services and quick shopping are also growing. However, he is cautious about certain industries, like cement and chemicals, stating that their high prices don’t match their actual earnings.
He also thinks that even though the Indian economy is growing, many companies are making too much profit, and this could lead to lower profits in the future due to more competition and changing market dynamics. While government spending is expected to increase in the future, it might not be enough to significantly change how prices behave due to the high valuations that many companies hold. People in the market are likely reacting to news without focusing on real value or earnings.
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