Indian market poised for double-digit earnings growth over next 2 years: Dikshit Mittal

Dikshit Mittal, Senior Fund Manager at LIC Mutual Fund, says the headline index is masking a far more encouraging story unfolding in mid- and small-cap segments, where earnings momentum has been notably robust.

Mittal attributes the Nifty's relative stagnation — a trend he notes has persisted for nearly two years — to its heavy concentration in large banking and IT companies, both of which are experiencing a cyclical slowdown in earnings. Strip those out, he says, and the market picture changes considerably.

Market has become quite stock and sector specific. Wherever we have good earnings growth visibility, the market is rewarding those stocks.

-Dikshit Mittal, Senior Fund Manager, LIC Mutual Fund

On the ongoing Q4 FY25 earnings season, Mittal expressed measured optimism. With roughly half the results declared, the aggregate has delivered index-level growth of 6–7%, broadly in line with analyst expectations and notably free of any major negative surprises. He acknowledged that the full impact of recent geopolitical tensions may only be visible from Q1 FY27 onwards, giving the current earnings cycle a degree of insulation.


6–7%
Q4 Index earnings growth

2 yrs
Double-digit growth horizon

Below average
Current Nifty PE multiple

Looking further ahead, Mittal is particularly constructive on valuations. The Nifty is currently trading below its long-term average price-to-earnings multiple — a level he views as an attractive entry point for investors with a one-year or longer horizon. Earnings growth, which has been sluggish at mid-single digits for the past two years, is expected to re-accelerate meaningfully, driven by recovery in banking, consumer-facing businesses, and the industrials sector.

He expects that a resolution of ongoing geopolitical tensions — potentially within the next 10 to 15 days — could act as a meaningful catalyst, with earnings revival potentially visible as early as Q2 FY26. If that plays out, Mittal believes India could sustain double-digit profit growth through FY27 and FY28, a scenario the market is already beginning to price in.

"If you take more than a one-year view," he told ET Now, "markets are looking good both from a fundamental basis as well as from a valuations perspective." For investors willing to look past near-term noise, that may be as clear a green light as any.