Lofty earnings growth estimates, liquidity boom keep stocks afloat

Predicting the future is never easy. Ask any analyst on the Street. They have been consistently wrong at predicting what Nifty earnings per share (EPS) will be over the next two financial years. Since FY11, the consensus estimates have always overshot actual earnings (see table). For instance, in FY17, the estimated two-year forward earnings growth was 63 per cent. This was way off the mark as the actual number came in at 19 per cent. However, this has not deterred sell-side analysts from scaling back expectations. They are forecasting Nifty earnings to grow by more than 60 per cen.....

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