FY26 earnings projected to grow 12-13% in India

Srinivas Rao Ravuri, the Chief Investment Officer at Bajaj Allianz Life Insurance, has shared his views on the equity market outlook. He believes that earnings will grow by 12-13% in FY26, even after a downgrade earlier this year. Ravuri advises investors to have a long-term perspective due to ongoing global uncertainties. He points out that while the global economic environment is volatile, India's situation is improving. High-frequency indicators suggest that normal economic growth is returning. He also noted that stock valuations, especially for large companies, have become more reasonable after recent market corrections. For investments, Ravuri suggests that equity investors should plan for at least three to five years. He sees great potential in sectors like banking, consumer goods, and domestic manufacturing, driven by India's young and growing population. As interest rates shift globally, Ravuri expects the Indian market to react positively, especially with recent rate cuts from the Reserve Bank of India. Lower interest rates generally support equity markets, but he emphasizes that economic activity and corporate earnings will play a more significant role than interest rates in the near term. Ravuri highlights the banking sector as a strong investment opportunity. He believes that private banks, in particular, could generate higher returns. Additionally, sectors catering to India's evolving needs, like food delivery and domestic manufacturing, are also poised for growth. He underscores the importance of asset allocation in investment strategies. A proper asset allocation can help investors navigate market volatility and achieve their financial goals. Ravuri notes a shift in saving patterns, with more people investing in financial assets instead of traditional physical ones. He also introduced the Bajaj Allianz Life Focused 25 Fund, explaining that a concentrated portfolio of high-growth stocks can offer better returns than diversified funds. He cites past performance in the Nifty 100 index as evidence of the advantages of focusing on top-performing stocks. Regarding upcoming Q4 earnings, Ravuri expects a slight improvement in results compared to previous quarters. He anticipates that FY25 will close with modest earnings growth and that FY26 earnings growth could help maintain India's strong valuation in the market.