“If you look at the consensus estimates for the market as a whole, it is turning out to be about 15 to 16% for both fiscal 2026 and 2027. I would expect at least the fiscal 2026 number to come down to just low teens or early double digits,” he said.
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While valuations have corrected over the past six to seven months, he said they still don’t offer compelling entry points.
What’s more concerning is that earnings estimates — after briefly stabilising — have started falling again with the onset of the January–March 2025 (Q4FY25) results season.
Raychaudhuri believes this domestic earnings weakness poses a greater risk than global market uncertainty. However, he remains constructive on India’s longer-term prospects, especially as global supply chains continue to shift.
Some sectors may continue to remain under pressure. For instance, he noted, “Consumer, particularly consumer staples companies are constantly postponing their turnaround target.”
IT services also face sluggish demand due to cautious corporate spending in the US. Globally linked sectors such as metals, IT, and parts of pharma, which together make up nearly 40% of India’s earnings base, are at risk of further downgrades.
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For the entire interview, watch the accompanying video
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