Q2 guide: Amid dull expectations, chase value rather than punt on growth

Positive surprises can be expected in IT and pharma, including in tier-II stocks

The second-quarter (Q2) results have just started coming in. It's too early to see trends. If we look at consensus expectations, those are not very high. A combination of adverse macro-trends and sector-specific pressures could have led to low growth. The negatives include high crude prices, a falling rupee, rising raw material inputs due to high petro prices and import tariffs, plus a non-banking financial company (NBFC) crisis that has led to high bond market yields.

Adjustments will have to be made for base effects caused by the goods and services tax (GST) launch last year. The Q2 of 2017-18