Shedding market myopia: Excessive QoQ focus can make you miss some multibaggers, says Gurmeet Chadha

As investors tend to chase momentum in equities, a section of market experts continues to caution against excessive fixation on short-term metrics like quarter-on-quarter (QoQ) earnings. They emphasize that such a narrow focus might cause investors to overlook future multibaggers, particularly in sectors like manufacturing and pharmaceuticals, where companies are making bold, long-term bets on growth.

Amid the broader optimism seen in India’s manufacturing cycle and the consistent outperformance of the pharmaceutical sector, buoyed by strong exports and a pickup in capex, analysts are calling attention to firms that are consciously sacrificing near-term profitability to build long-term value.

In a recent post on X (formerly Twitter), Gurmeet Chadha, Managing Partner and CIO at Complete Circle Consultants, advised investors to look beyond immediate earnings pressures when evaluating companies investing in future growth.


“In manufacturing and pharma, look at companies investing heavily in R&D, doing focused capex or strategic acquisitions taking calculated risk,” Chadha wrote.


He acknowledged that such moves may impact short-term financial performance: “Short term may dilute return ratio and EPS, but will be very rewarding long term.” He concluded with a word of caution for investors who rely too heavily on quarterly metrics: “Too much focus on QoQ can make u miss some Multibaggers.”

Others echoed similar views. An X user, Rohan Tantia commented on the post, saying, “In both manufacturing and pharma, companies that are investing ahead of the curve — in R&D, capacity expansion, or strategic acquisitions — often look ‘optically expensive’ or show temporary dips in return ratios and EPS. But those are investments in future cash flows, not inefficiencies.”

Further, another user, Kuldeep Verma, too, pointed out the risk of overlooking long-term potential by getting caught up in short-term movements. “Short-term dips hide long-term winners. Focus on growth, not just quarterly results,” he posted.

While investor interest continues to focus on quarterly results of the companies, market voices are urging participants not to lose sight of structural opportunities in core sectors like manufacturing and pharma.

According to these experts, companies that are deploying capital towards R&D and expansion today may appear less attractive on a quarter-by-quarter basis, but could deliver substantial value in the years ahead.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)