Revenue Growth Slower Than Nominal GDP Weighs On Market Sentiment: Macquarie Analyst

Corporate India's revenue growth over the last four quarters has been slower than nominal growth in the gross domestic product and is weighing on market sentiment, according to a senior Macquarie analyst.

"Earnings growth has to be nominal GDP plus X. But in the past four quarters, revenue growth of the broader MSCI India companies has been 5-6%. It has been GDP minus rather than GDP plus," Aditya Suresh, managing director and head of equity research-India at Macquarie Capital, told NDTV Profit. "We have seen margin erosion."

India's nominal GDP growth rate was 9.9% in the financial year 2025 and 8.8% in the first quarter of FY26, as per government data.

Foreigners have alternatives like South Korea and Taiwan over India. The markets are only finding support for domestic investors, he pointed out.

India has gone from fund managers’ top Asian stock market pick to their least preferred in just three months amid US President Donald Trump’s tariff escalation, according to a recent Bank of America Corp. survey reported by Bloomberg News.

The survey showed 30% are underweight on India, followed by 20% for Thailand and 10% for Malaysia. Japan fared the best, with China taking the No. 2 spot. A total of 99 panelists with $183 billion of assets responded to the survey’s regional questions.

Asian equities have been rallying since Trump went back on his April tariffs, with subsequent deals with a number of nations, such as Japan and Korea, easing concerns around world trade.

Suresh also said he is selective in the consumption space, given the expected boost from tax cuts. He noted that margin estimates for some companies in the capital goods sector are still high and may not necessarily translate to actual expansion.