Indian equities are likely to outperform their regional benchmark index despite a bruising year, with corporate earnings growth expected to accelerate to 17 per cent next fiscal year, according to a new report from Jefferies.
The report by Jefferies' Asia Maxima, authored by global head of equity strategy Chris Wood, recommends a 12 per cent allocation to India against a 10.5 per cent weight in the MSCI AC Asia Pacific ex-Japan index. That call comes even as Indian stocks have fallen 15.6 per cent in dollar terms this year — and 13.4 per cent in local currency on the Nifty, making India the second-worst-performing market in the region behind Indonesia, which has lost 42.3 per cent.
Growth story intact
The report argues the structural growth story remains intact and the data is "remarkably resilient". Wood expects 6.5-7 per cent real GDP growth and 11-12 per cent nominal growth in FY27, with earnings growth rising from 14 per cent this year to 17 per cent next fiscal.
India was maintained as a slight overweight last quarter on evidence of a cyclical rebound in domestic demand. Since April 2020, India has outperformed the Asia Pacific ex-Japan benchmark by 17 per cent, though the report notes valuations remain at a premium — MSCI India trades at 20.5 times 2026 expected earnings against a 12.4 times regional average.
Credit boom signals capex cycle
The report points to a broad credit expansion as evidence that the long-anticipated private-sector capital expenditure cycle may finally be under way: bank credit expanded 18.1 per cent year-on-year as of mid-September, corporate loans rose 21.6 per cent in August, loans to small, medium and micro enterprises grew 25.5 per cent, and deposits expanded 17.3 per cent.
Supporting data includes machinery imports of $66 billion in the 12 months ended August against $29 billion in FY21, GST collections up 14.8 per cent in August, power consumption up 9.4 per cent in April-August, and residential property sales in the top seven cities up 7 per cent in the first eight months after a 1 per cent decline in 2025. The report also flags heavy share issuance as a key upside cap — monthly equity issuance jumped to $9.5 billion in August from $1 billion in April, absorbing mutual fund inflows of Rs 38,800 crore a month — and suggests the rupee may have bottomed after a 10.7 per cent decline since early 2025.
Sources:
Indian markets likely to outperform, corporate earnings to rise up to 17 pc: Report (IANS via tennews.in)
The report by Jefferies' Asia Maxima, authored by global head of equity strategy Chris Wood, recommends a 12 per cent allocation to India against a 10.5 per cent weight in the MSCI AC Asia Pacific ex-Japan index. That call comes even as Indian stocks have fallen 15.6 per cent in dollar terms this year — and 13.4 per cent in local currency on the Nifty, making India the second-worst-performing market in the region behind Indonesia, which has lost 42.3 per cent.
Growth story intact
The report argues the structural growth story remains intact and the data is "remarkably resilient". Wood expects 6.5-7 per cent real GDP growth and 11-12 per cent nominal growth in FY27, with earnings growth rising from 14 per cent this year to 17 per cent next fiscal.
India was maintained as a slight overweight last quarter on evidence of a cyclical rebound in domestic demand. Since April 2020, India has outperformed the Asia Pacific ex-Japan benchmark by 17 per cent, though the report notes valuations remain at a premium — MSCI India trades at 20.5 times 2026 expected earnings against a 12.4 times regional average.
Credit boom signals capex cycle
The report points to a broad credit expansion as evidence that the long-anticipated private-sector capital expenditure cycle may finally be under way: bank credit expanded 18.1 per cent year-on-year as of mid-September, corporate loans rose 21.6 per cent in August, loans to small, medium and micro enterprises grew 25.5 per cent, and deposits expanded 17.3 per cent.
Supporting data includes machinery imports of $66 billion in the 12 months ended August against $29 billion in FY21, GST collections up 14.8 per cent in August, power consumption up 9.4 per cent in April-August, and residential property sales in the top seven cities up 7 per cent in the first eight months after a 1 per cent decline in 2025. The report also flags heavy share issuance as a key upside cap — monthly equity issuance jumped to $9.5 billion in August from $1 billion in April, absorbing mutual fund inflows of Rs 38,800 crore a month — and suggests the rupee may have bottomed after a 10.7 per cent decline since early 2025.
Sources:
Indian markets likely to outperform, corporate earnings to rise up to 17 pc: Report (IANS via tennews.in)
