India Inc about to kick off earnings super-cycle, may double Indias m-cap by 2030

By Indiatimes3 days ago

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MUMBAI: Analysts from ICICI Securities to Morgan Stanley are sounding increasingly certain that the Indian Inc has entered an era of earnings growth not seen over the past decade. The confidence stems from the hope that the Indian and global economies may soon exit the Covid-19 pandemic and enter the roaring 20s of economic prosperity.

Governments, globally, are driving counter-cyclical fiscal policies, which are being augmented by QE (quantitative easing) from major central banks, thereby, increasing the likelihood of a global revival in demand, Vinod Karki and Siddharth Gupta of ICICI Securities said in a recent note.

Karki and Gupta believe the cycle of gloom in terms of earnings growth that the Indian corporate sector was caught in over the past seven years is coming to an end. Analysts have upgraded earnings expectations from the September quarter onwards for the first time in years.

Earnings mirage

Forecasting earnings growth in India has been an excruciating exercise since 2014, as analysts would begin the financial year projecting strong earnings growth only to taper them down in the later months when corporate earnings disappoint.

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