MSCI India companies' earnings growth to accelerate to 14 pc in FY27: Report
New Delhi, July 17
MSCI India companies are expected to post 14 per cent earnings growth in the current fiscal year, according to Jefferies' GREED & Fear report.
The MSCI India Index measures the performance of large- and mid-cap segments of the Indian market, covering approximately 85 per cent of the Indian equity universe.
For FY26, Jefferies estimates EPS growth at 10 per cent, followed by an expected acceleration to 14 per cent in FY27 and 17 per cent in FY28, indicating a strengthening corporate earnings outlook over the next two fiscal years.
It noted MSCI India earnings per share (EPS) growth rebounded from a 7 per cent decline in FY20 to 5 per cent in FY21 before surging to 41 per cent in FY22. Growth then normalised to 10 per cent in FY23, rose to 18 per cent in FY24, and eased to 12 per cent in FY25.
Despite the improving earnings outlook, the report noted, India has remained an "inverse AI trade" in global equity markets, while its dependence on imported energy has emerged as an additional headwind amid the continuing fallout from the US-Israel attack on Iran.
"This was reflected in massive net foreign selling of Indian stocks by dedicated emerging market investors to raise cash to invest in tech hardware stocks in Korea and Taiwan in 1H26," it noted.
Foreign investors sold a record net USD 29 billion worth of Indian equities in the first half of 2026, following net outflows of USD 18.8 billion in 2025. However, they have turned net buyers in July, investing a net USD 1.8 billion so far, it was noted.
However, "The main driver of this foreign selling was nothing to do with India and everything to do with the surging neutral weighting of Korea in the MSCI Emerging Market Index, which soared from 9.0% to 23.7% since the beginning of last year and the end of last quarter," it said.
Jefferies also said India's stock market has remained relatively resilient for domestic investors in rupee terms, although the rupee has fallen 11.1 per cent against the US dollar since the beginning of last year.
— ANI
Reader Comments
Interesting how MSCI India can have such a high EPS growth but still face 'inverse AI trade' issues. Foreign selling because of Korea weighting increase is a structural shift, not a reflection on India's fundamentals. But we need to watch the rupee depreciation - falling 11.1% against USD is concerning for importers.
All this data is fine but ground reality for common investors like us? Mutual funds and retail still holding strong. FIIs can come and go, but India's consumption story remains intact. Let's see if FY27 really delivers 14% growth or if global headwinds slow us down.
The dependence on imported energy being a headwind is a real risk. With oil prices volatile and global tensions, we need to accelerate our renewable energy push. Otherwise this 14% growth projection could be derailed. Good that domestic investors are not panicking like before.
As an expat tracking Indian markets, I see strong earnings momentum. The 41% growth in FY22 was exceptional but the current trajectory of 10-14-17% for FY26-28 shows sustainable acceleration. Key will be whether India can reduce its energy import bill and improve manufacturing competitiveness.
"FIIs sold record $29 billion but now buying again" - typical FII behavior, buy high sell low and then come back. Our SIP culture is the real strength. But let's not get complacent, global factors like US-Israel Iran tensions can disrupt energy prices anytime. Stay invested but stay vigilant. 😊
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