FY27-28 earnings may see mid-double-digit growth; West Asia crisis a risk: Kotak Institutional Equities’s Pratik Gupta
Kotak Institutional Equities is expecting 16% growth in Nifty 50 earnings per share in 2026-27 and 14% in 2027-28.
- Mar 5, 2026,
- Updated Mar 5, 2026 6:00 PM IST
India's equity markets, despite their underperformance to many other markets over past 12-18 months, remain relatively expensive, and investors amid the current geopolitical uncertainties are taking a more longer-term 3-5-year bet on India, according to a top expert.
"We are still trading almost 20 times one year forward, which is not as expensive (than earlier), but still expensive. I think we would start getting cheap if we were 10-12% lower. So, either earnings go up or market comes down or most likely the market kind of just trades gently sideways for the next 6-9 months, " said Pratik Gupta, CEO and co-head of institutional equities at Kotak Securities.
The Indian stock market saw lackluster returns in 2025 amid geopolitical tensions, US import tariff-related uncertainties and slow earnings growth. Corporate earnings in the October-December quarters raised expectations that the worst was behind and things were likely to pick up.
However, the escalating conflict in West Asia has thrown a spanner in the works with disruption in crude oil and natural gas supplies likely to hit a major importer like India hard, should the crisis get prolonged for long.
"It's a bit like catching a falling knife. For the time being, the consensus view seems to be that this will get over in a few weeks. But everyone thought the same about Russia-Ukraine. So, who knows how long this stretches. It's a tough environment, so wait and watch, " opined Gupta.
Kotak Institutional Equities still expects corporate earnings to pick up to mid-double digits in financial years 2027 and 2028 after two years of slow growth. It is expecting 16% growth in the Nifty 50 earnings per share in 2026-27 and 14% in 2027-28, although there is now expected to be some downside risk to certain industries due to the crisis in West Asia.
Markets had been under sharp selling pressure last few sessions, but rebounded on March 5, tracking gains in US markets overnight.
Kotak Institutional Equities currently remains negative on the oil marketing companies. Gupta feels the companies will be forced to absorb some of the impact of the higher crude prices and marketing margins will get impacted. While India has oil reserves and can also import from Russia, the bigger issue in the short-term will be on gas, where there is zero inventory and constraints are already kicking in for industry usage.
On the other hand, investors are extremely bullish on healthcare, especially hospital operators.
"Hospitals there is a very strong growth outlook, there is shortage of hospital beds all across and almost every hospital chain is expanding bed capacity," pointed Gupta.
On the pharma front, while the domestic-focused players are seeing steady demand, the US-focused generic drug makers are still seeing intense price competition, he stated.
There also seems to be a lot of foreign institutional investor interest in banks and non-bank financial services companies. However, they remain underweight on IT services, where are there worries of artificial intelligence (AI) disrupting jobs, according to Gupta.
"Criticism from investors has been that Indian IT companies have been somewhat slow in adopting AI or adapting to AI and changing their business models. There is lot more urgency now and that also came out from the communications with investors. But, time will tell whether they dramatically overhaul their products and services, " noted Gupta.
Kotak believes just like in the past, IT companies will adapt and rollout new products and services. Gupta also pointed there will remain a huge market for AI implementation and that enterprises will still need IT companies. However, he feels the pricing models would change.
India's equity markets, despite their underperformance to many other markets over past 12-18 months, remain relatively expensive, and investors amid the current geopolitical uncertainties are taking a more longer-term 3-5-year bet on India, according to a top expert.
"We are still trading almost 20 times one year forward, which is not as expensive (than earlier), but still expensive. I think we would start getting cheap if we were 10-12% lower. So, either earnings go up or market comes down or most likely the market kind of just trades gently sideways for the next 6-9 months, " said Pratik Gupta, CEO and co-head of institutional equities at Kotak Securities.
The Indian stock market saw lackluster returns in 2025 amid geopolitical tensions, US import tariff-related uncertainties and slow earnings growth. Corporate earnings in the October-December quarters raised expectations that the worst was behind and things were likely to pick up.
However, the escalating conflict in West Asia has thrown a spanner in the works with disruption in crude oil and natural gas supplies likely to hit a major importer like India hard, should the crisis get prolonged for long.
"It's a bit like catching a falling knife. For the time being, the consensus view seems to be that this will get over in a few weeks. But everyone thought the same about Russia-Ukraine. So, who knows how long this stretches. It's a tough environment, so wait and watch, " opined Gupta.
Kotak Institutional Equities still expects corporate earnings to pick up to mid-double digits in financial years 2027 and 2028 after two years of slow growth. It is expecting 16% growth in the Nifty 50 earnings per share in 2026-27 and 14% in 2027-28, although there is now expected to be some downside risk to certain industries due to the crisis in West Asia.
Markets had been under sharp selling pressure last few sessions, but rebounded on March 5, tracking gains in US markets overnight.
Kotak Institutional Equities currently remains negative on the oil marketing companies. Gupta feels the companies will be forced to absorb some of the impact of the higher crude prices and marketing margins will get impacted. While India has oil reserves and can also import from Russia, the bigger issue in the short-term will be on gas, where there is zero inventory and constraints are already kicking in for industry usage.
On the other hand, investors are extremely bullish on healthcare, especially hospital operators.
"Hospitals there is a very strong growth outlook, there is shortage of hospital beds all across and almost every hospital chain is expanding bed capacity," pointed Gupta.
On the pharma front, while the domestic-focused players are seeing steady demand, the US-focused generic drug makers are still seeing intense price competition, he stated.
There also seems to be a lot of foreign institutional investor interest in banks and non-bank financial services companies. However, they remain underweight on IT services, where are there worries of artificial intelligence (AI) disrupting jobs, according to Gupta.
"Criticism from investors has been that Indian IT companies have been somewhat slow in adopting AI or adapting to AI and changing their business models. There is lot more urgency now and that also came out from the communications with investors. But, time will tell whether they dramatically overhaul their products and services, " noted Gupta.
Kotak believes just like in the past, IT companies will adapt and rollout new products and services. Gupta also pointed there will remain a huge market for AI implementation and that enterprises will still need IT companies. However, he feels the pricing models would change.