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India's Earnings Poised for Resurgence After Slump
13 Nov, 2025
Summary
- India may be on the verge of an earnings revival
- FII flows expected to return as earnings upgrade cycle begins
- Opportunities in capex, financialization, and discretionary consumption
According to Devang Mehta of Spark Capital, India's markets may be on the verge of an earnings revival after a year of underperformance. As of November 13, 2025, key macro fundamentals are now aligning, with inflation at multi-year lows, supportive policy, rising consumption, and improving management commentary.
Mehta believes the tide is turning for India's markets, which have seen significant volatility and underperformance compared to global peers over the past year. However, he predicts that the earnings downgrades could soon be coming to an end, with upgrades potentially emerging in the next couple of quarters.
Mehta highlights three structural themes that he believes offer strong multi-year opportunities: capital goods, engineering, and power; the financialization of savings; and discretionary consumption. He notes that a millionaire is created every hour in India, and these proxy plays are on a long-term uptrend.
With foreign institutional investors (FIIs) having been persistent sellers, weighing on market sentiment, Mehta believes a reversal could be ahead. He notes that for a typical bull market, FPI support is needed, and the case for FII flows improving is stronger now than a year ago.
