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Corporate earnings show a mild recovery, but valuations remain a major concern India Inc.’s earnings performance for the second quarter of the financial year has turned out to be largely in line with street expectations . Both revenue and profits , when compared to the results reported for the first quarter ending June , have shown signs of improvement that suggest a slow but steady pick-up in demand in the wider economy. This is comforting news for many who feared that the twin shocks of demonetization and the hasty implementation of the GST would have significant medium to long-term effects on the economy. The quick rebound in the earnings of corporate India, however, should not come as too much of a surprise. Both demonetization and the introduction of the GST, while definitely disruptive, are transitory in terms of their economic impact. It is also worth noting that most analysts had revised their earnings estimates downwards in the wake of the rapid policy changes. Su...
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