New Delhi

MSCI India companies are expected to post 14 per cent earnings growth in the current fiscal year, according to Jefferies' GREED & Fear report.

The MSCI India Index measures the performance of large- and mid-cap segments of the Indian market, covering approximately 85 per cent of the Indian equity universe.

For FY26, Jefferies estimates EPS growth at 10 per cent, followed by an expected acceleration to 14 per cent in FY27 and 17 per cent in FY28, indicating a strengthening corporate earnings outlook over the next two fiscal years.

It noted MSCI India earnings per share (EPS) growth rebounded from a 7 per cent decline in FY20 to 5 per cent in FY21 before surging to 41 per cent in FY22. Growth then normalised to 10 per cent in FY23, rose to 18 per cent in FY24, and eased to 12 per cent in FY25.

Despite the improving earnings outlook, the report noted, India has remained an "inverse AI trade" in global equity markets, while its dependence on imported energy has emerged as an additional headwind amid the continuing fallout from the US-Israel attack on Iran.

"This was reflected in massive net foreign selling of Indian stocks by dedicated emerging market investors to raise cash to invest in tech hardware stocks in Korea and Taiwan in 1H26," it noted.

Foreign investors sold a record net USD 29 billion worth of Indian equities in the first half of 2026, following net outflows of USD 18.8 billion in 2025. However, they have turned net buyers in July, investing a net USD 1.8 billion so far, it was noted.

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However, "The main driver of this foreign selling was nothing to do with India and everything to do with the surging neutral weighting of Korea in the MSCI Emerging Market Index, which soared from 9.0% to 23.7% since the beginning of last year and the end of last quarter," it said.

Jefferies also said India's stock market has remained relatively resilient for domestic investors in rupee terms, although the rupee has fallen 11.1 per cent against the US dollar since the beginning of last year.