Shailendra Kumar: Indian Equities Need Earnings Growth for Sustained Recovery

Shailendra Kumar, Chief Investment Officer at Narnolia Financial Services, stated that the recent recovery in Indian equities is still distant from establishing a sustained risk-on trend. He noted that while valuations climbed in 2024, they have since corrected and are now closer to the lower end of their historical range. Kumar believes a sustained revival in foreign institutional investor flows requires domestic companies to regain their earnings-growth advantage.

The advice suggests that India may reclaim a larger share of global investor allocations if corporate earnings growth improves relative to other global markets. The moderation in valuation multiples is expected to rekindle long-term investor interest and create opportunities for intermittent rallies in the market.