India is not at an absolute rock bottom valuation, but much better than 2024: Tata Mutual Fund's Rahul Singh

Subscribe to enjoy similar stories. India has reached a point where if emerging markets start getting flows, a possibility due to the uncertain macro environment, India will get its share of foreign institutional flows, said Rahul Singh, chief investment officer - Equities at Tata Mutual Fund. “If emerging markets as an asset class start to get sustainable flows, foreign portfolio investors (FPIs) need not have to sell India to buy China," Singh said in an interview with Mint.

Apart from banking and financial services, a part of the Nifty 50 index is linked to commodity prices and large stocks in the energy, metals, and mining which may see significant growth next year. And this will provide further tailwind to Nifty earnings, which could be around 15%, said Singh. Edited excerpts: The growth has just started in different pockets, plus there are some hits and misses as some input tax credits are not fully passed on.

It is definitely a structural positive, but the impact of demand revival on earnings will probably come by fiscal 2027 and not really this year. In the last quarter, we saw the starting signs of GST cuts working in the insurance and auto sector. Last year, Nifty 50 earnings per share growth was in the 3% range.

This year, it is likely to be in the 7-8% range. And next year the expectations are around 15%.
Apart from banking and financial services, which are likely to see a rebound in earnings growth, a material part of the index is linked to commodity prices, and large stocks in the energy, metals, and mining sectors are likely to see significant growth next year, which will provide further tailwind to Nifty earnings. Also, IT (information technology) downgrades have stopped, even though there are no strong