Oct 21, 2026 · 35 min · 9 segments
After two years of subdued market performance and sustained selling by foreign investors, is India poised for a stronger earnings cycle? In this episode of the businessline Podcast, Lokeshwarri SK…
R. SivakumarGuest
Lokeshwarri SKHost
So I'd like to know, will this resilience continue? And what is your expectations about the earnings growth for rest of FY27?
This is, I think, a quote or really our thesis that we've been running our portfolios for the last several months that rebound in earnings will come.
You know, one of the things to set this in context over the last couple of years, actually we went on a very, very low earnings growth period.
So to give you a sense of this, right, last year, for example, earnings grew at about And the reason why earnings have been growing at signal digits is overall nominal GDP has been growing at signal digits.
And when you have normal GDP growing at 8.5%, that's roughly what your corporate sales and earnings will be.
Because at the end of the day, GDP measures, well, total gross value added, in a sense, is a measure of profits in the system.
So the fact that we have been sitting at an 8.5% nominal GDP growth also tells you why earnings growth has been stuck at single digit growth.
We exited last year, that is to say March quarter itself, we moved into double digits.
For the full year, it was 8.5%, but March quarter started moving into double digits.
The fact that at an overall economy level, the whole system earnings is accelerated.
So yes, some companies will suffer because of higher commodity prices eating into margins.
But when you look at the sector as a whole, the relatively high inflation is actually contributing to profitability.
If I can take a moment to explain why, because last year we had CPI inflation sitting at the 0 to 2% level.
So even though we had 7% real growth, we had only 8 odd percent nominal growth.
So I'd like to know, will this resilience continue? And what is your expectations about the earnings growth for rest of FY27?
This is, I think, a quote or really our thesis that we've been running our portfolios for the last several months that rebound in earnings will come.
You know, one of the things to set this in context over the last couple of years, actually we went on a very, very low earnings growth period.
So to give you a sense of this, right, last year, for example, earnings grew at about And the reason why earnings have been growing at signal digits is overall nominal GDP has been growing at signal digits.
And when you have normal GDP growing at 8.5%, that's roughly what your corporate sales and earnings will be.
Because at the end of the day, GDP measures, well, total gross value added, in a sense, is a measure of profits in the system.
So the fact that we have been sitting at an 8.5% nominal GDP growth also tells you why earnings growth has been stuck at single digit growth.
We exited last year, that is to say March quarter itself, we moved into double digits.
For the full year, it was 8.5%, but March quarter started moving into double digits.
The fact that at an overall economy level, the whole system earnings is accelerated.
So yes, some companies will suffer because of higher commodity prices eating into margins.
But when you look at the sector as a whole, the relatively high inflation is actually contributing to profitability.
If I can take a moment to explain why, because last year we had CPI inflation sitting at the 0 to 2% level.
So even though we had 7% real growth, we had only 8 odd percent nominal growth.
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