Buzz Update ‘Corporate earnings must face inflation’ TOU

Buzz Update ‘Corporate earnings must face inflation’


‘Corporate earnings must face inflation’

Oldbridge Capital Management, which manages assets worth $ 800 million, hopes that inflationary pressures on corporate earnings will continue and that investors will stay away from consumer and consumer-centric companies.

Kenneth Andrade, founder and CIO of Oldbridge Capital Management, said in an interaction on Wednesday that markets have already reduced some companies’ earnings based on inflationary pressures and investors should look for companies that only have a steady cash flow. Transfer the rising cost to end users.

The productive sectors were ignored

Going forward, the government will focus on boosting performance-linked incentive schemes and exports, he said, adding that some companies should take advantage of the global manufacturing supply chain feed, especially as the world’s largest manufacturers are trying to find a niche in multiple headwinds. Manufacturing units in India founded by Global Cost Leadership.

Historically, values ​​and business models have been overlooked in this space because companies in the sector have been non-performers, he said.

He said that India’s signing of free trade agreements would increase inflation in the long run and every country would look to maintain its supply chain, but some inflation was always good for fresh investments and job creation.

High agricultural commodity prices

Businesses facing agriculture face the burden of high inflation, but are able to bear the additional costs. He said the profitability of these companies has reached a new high.

He said farmers were not looking towards the minimum support price to decide what to grow as the prices of most agricultural products were higher than the MSP.

With lower credit levels and better balance sheets, select companies in the agriculture sector look attractive because of their affordable value, says Andrade, a veteran with 10 years of asset management experience at IDFC AMC, where he manages a $ 8 billion corpus.

He said the newly listed start-ups had worked well to establish a business model and generate good cash flow and should continue for a long time without relying on external funding before ordering the right valuation. He said government-dependent corporates for business should benefit from its improved financial position and higher spending capacity.


April 14, 2022

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