Prachi Deuskar, Co-Founder of Lotusdew, anticipates a downward revision in corporate earnings estimates, aligning with GDP growth forecasts. She stated that Q1FY27 will experience squeezed margins due to higher input costs and supply chain disruptions, even if the conflict is resolved quickly. Deuskar emphasized that Corporate India’s robust balance sheet, following a deleveraging cycle, along with the banking sector’s health, will cushion the earnings shock.
She noted that India’s healthy inflation environment is positioned to sustain over the medium to long term but is vulnerable to short-term volatility. Key risks include a below-normal monsoon and crude prices influenced by Middle East tensions. Deuskar also highlighted the importance of localization in supply chains and investment opportunities in critical minerals, processing, and recycling.
Overall, she expects a significant impact on earnings estimates due to the ongoing geopolitical situation.
