As stated above, consistent increase in EBITDA in quarterly results generally means a brighter future for a company. This information is vital for stock analysts who make use of it in their future revenue projections of companies. This further feeds into their models which arrive at a valuation for the firm in question.
Hence, an increase in profits can lead to an upward revision in their stock prices and consistent strong performance further propels the price. If this rising trend is general, then most of the listed companies will see a rise in their stock price. This pushes the broad market stock indicators like the Sensex and Nifty higher. Translation: You make money.
To sum it up, lower inflation leads to lower interest rates. This boosts credit growth and leads to EBITDA margins improving resulting in earnings acceleration.
Equity investing is inherently interesting and can be very rewarding if done judiciously. Though the arena is extensive and the information available may seem daunting to digest, one should not feel put down by the volume of information and technical details. Sometimes, information about key drivers is sufficient to make informed and rewarding decisions. And whenever you're feeling bogged down, remember what Peter Lynch, the celebrated fund manager and investor said: "Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it."