Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services

An important takeaway from the Q3 results is the improving profitability of India Inc. EBITDA and profit after tax are growing impressively even while sales growth is average. Automobiles, pharmaceuticals and capital goods are doing very well. In banking there is impressive credit growth and improving profitability. PSU banks are outperforming private sector banks due to low valuations which continue to be fair even after the run up in prices. Investors should be careful while chasing many mid and small caps which are rising sharply without fundamental justification. Many of these stocks have very low floating stock and, therefore, can easily be manipulated by a cartel of operators. In the long run only stocks with strong fundamentals will give steady and good returns.