Rajiv Batra sees India entering double-digit earnings growth in FY27 – News Air Insight

India’s equity markets, which have lagged other emerging and Asian peers despite strong earnings growth, may finally be poised for a comeback, according to Rajiv Batra from JPMorgan. Batra discussed market trends, earnings expectations, and the impact of policy measures on consumption.

Batra, in an interview with ET Now, said, “We started the year at a PE of around 22, and a year ago it was 24. Currently, we are at 21. The market expects low to mid-teen earnings growth, which will likely show in the second half of the fiscal year. The December quarter could deliver 11% growth, and March next year around 13%. Double-digit growth will be a second-half story, but the market is always forward-looking.”

On future growth, Batra added, “This year, nominal revenue growth is around 8.8-9%. Next year, double-digit GDP growth is likely. With costs, borrowing, and raw material prices easing, earnings growth of 14-15% for FY27 is possible. Consensus forecasts are cautious, but upward revisions could come after strong festive sales.”

Addressing consumption, he explained, “The GST cut is not a one-off; it is permanent. Previous rate cuts were not reversed, and easing is likely to continue. Fiscal measures like the 8th Pay Commission may add 1-1.5% to GDP. This supports sustained consumption.”

On rural and urban spending, Batra noted, “Rural consumption is back after good monsoons. Urban demand has been under pressure for a long time, but tax reductions are putting more money in consumers’ hands. People can spend, deleverage, or invest, and we see more focus on assets rather than just goods.”

On sector rotation and consumption-driven growth, he said, “Diversification and rotation are the trends across emerging markets. Discretionary spending is key—people are buying vehicles, appliances, and insurance. Consumer financing supports this cycle. Over 18-24 months, higher consumption could lead to private investment and capex, which has been absent in India for the last decade.”Batra’s insights suggest a market recovery supported by policy easing, festive consumption, and structural benefits from GST and fiscal measures. Analysts expect double-digit earnings growth in the second half of the fiscal year.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)