India’s economic growth has not resolved investors’ concern over whether corporate earnings can last long enough to support Indian shares’ valuation premium, Morgan Stanley India equity strategist Ridham Desai told NDTV Profit.
India’s real GDP grew 7.8% year over year in April-June 2026, the first quarter of fiscal 2026-27. The Nifty 50 was down 12.28% year to date at 6 a.m. ET (10:00 UTC) on Oct. 29. The GDP figure covers one quarter of economic output, while the index return tracks market performance from the start of the year through a later date.
Desai told NDTV Profit that earnings growth in Japan, Taiwan, South Korea, China, the United States and Germany had outpaced India’s. He also said India’s earnings growth spanned more sectors, while some other markets relied on fewer industries and companies.
NDTV Profit framed Desai’s concern around “terminal growth,” or how companies’ earnings may develop after near-term forecasts end. Those longer-range expectations can influence what investors are willing to pay for shares.
Desai also identified artificial intelligence as a possible pressure on India’s services-export advantage. The Reserve Bank of India (RBI) reported that software services exports, excluding sales through overseas commercial presence, reached $190.7 billion in fiscal 2023-24, up 2.8%. Moneycontrol reported that Desai said at an Oct. 30 News18 summit that AI-related disruption was not yet visible in sector data.
Demographic change adds another long-term question. United Nations Population Fund (UNFPA) estimates for 2025 put India’s total fertility rate at 1.9 births per woman; 7% of the population was 65 or older, while 68% was ages 15 to 64. In a Morgan Stanley podcast published in June, Desai described relative growth as a challenge but said India’s long-term growth potential remained stronger than that of many other countries.
The Ministry of Statistics and Programme Implementation (MoSPI) release calendar lists the second-quarter fiscal 2026-27 GDP estimate for Nov. 30.
