The earnings optimism surrounding India’s domestic-focused companies may be misplaced as the economy will take longer to recover from a Covid-fueled slump, according to JPMorgan Chase & Co.
Firms with a heavy reliance on local demand may face a slew of profit downgrades this year due to subdued consumption and wage growth, said Sanjay Mookim, JPMorgan’s head of research, India. The warning comes as sell-side analysts estimate overall earnings per share for companies in the benchmark NSE Nifty 50 Index to rise almost 17% over the next 12 months.