Macquarie has flagged concerns over India’s market performance in its Asia strategy report. The brokerage notes that India’s valuations remain two standard deviations above the long-term average, reflecting the market’s optimistic growth runway. However, it warns that consensus has sharply accelerated earnings potential, putting pressure on forward growth projections.
The report highlights that while the growth narrative has so far been driven by faith and conviction, the momentum is beginning to falter. Macquarie sees signs of deceleration in growth across sectors and limited evidence to justify earnings upgrades. Despite earlier cuts in estimates being absorbed, the brokerage observes a lack of catalysts to drive market performance further. From a bottom-up perspective, the report stresses the need for support at a sectoral level to sustain India’s growth trajectory, cautioning investors against overly optimistic assumptions in the current economic climate.
