India’s earnings cycle turns the corner; double-digit growth expected in H2: Jyotivardhan Jaipuria

India’s second-quarter earnings season delivered a steady—if unspectacular—performance, but the next two quarters could finally mark an earnings revival. Jyotivardhan Jaipuria, Founder & MD, Valentis Advisors, told ET Now that while the September quarter came in slightly better than expected, and the second half of FY25 is shaping up to deliver 10–12% earnings growth at the Nifty level.

GST delays have shifted growth into Q3

Jaipuria noted that purchases across categories were delayed because consumers and businesses waited for GST rate cuts announced on Independence Day. This pushed demand into October, which has now seen strong festive-season traction, setting the stage for a better third quarter.

Bank earnings to lead the recovery

Banks, which posted weak numbers in the first half due to tighter deposit rates and pressure on margins, are expected to rebound. As banks realign deposit costs downward, NIMs should expand, aiding earnings momentum.


“Bank earnings were negative in H1, but will accelerate meaningfully in H2,” Jaipuria said.

Sectoral picks: Pharma, chemicals, capital goods, consumer discretionary

Valentis Advisors is selectively bullish on:

• Pharma & chemicals, where volumes and pricing are stabilising
• Capital goods, many of which have corrected and now look attractively priced
• Consumer discretionary, which benefits from festive demand and improving purchasing power

However, the firm remains cautious on consumer staples and selectively wary of IT, where long-term growth visibility has moderated.

Jaipuria emphasised that the firm’s approach remains centred on growth at reasonable valuations. Their portfolio companies are expected to deliver 25% earnings growth, while trading at a portfolio-level PE of around 17.5x—a balance of value and visibility.

The big trigger now: Return of FPI flows

Despite strong domestic inflows, the Indian market has lacked foreign investor participation. But that may now be reversing. Three factors support the case:

• India is the worst-performing EM in the last year, underperforming MSCI EM by 20%—leaving valuations more reasonable.
• FPIs are massively underweight—roughly 250 bps below benchmark weight, creating room for re-allocation.
• Valuation premiums have normalised—India now trades at a 55% premium to EMs versus 100% a year ago.

"I don’t expect FPIs to be big sellers from here; if anything, flows should moderate and potentially turn positive," Jaipuria noted.

Macros strong, earnings turning, valuations no longer extreme

India’s broader macro setup—moderating inflation, stable fiscal and current account numbers—remains supportive.

With earnings bottoming out, festive demand kicking in, and FPIs likely to return, Jaipuria believes markets have room to move higher, even from the 26,000 Nifty zone.