Dipan Mehta expects a deep correction in the stock market, possibly as much as 10-12% on the Nifty and the Sensex. Corporate results have been disappointing, with growth rates of 10-12% but not enough to encourage buying at current valuations. Profit margins have expanded due to commodity prices, but this trend may level off. The next six months could see very disappointing earnings seasons. Banks are also facing challenges, with concerns about NPAs and slower growth in advances due to cautious lending and a war for deposits.
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