FY26 To Mark Recovery In Growth, Earnings To Hit Double Digits: Citi's Surendra Goyal

After a year of earnings normalisation in the previous fiscal, the Indian economy and markets appear poised for a recovery in financial year 2026, according to Surendra Goyal, head of India research at Citi.

Speaking to NDTV Profit, Goyal pointed to encouraging data points and policy changes that could lift gross domestic product growth above 6.5% and push earnings growth into double digits.

Fiscal 2025 saw a slowdown in earnings to mid-to-high single digits, well below the pace of the previous four years. However, Goyal noted that recent GDP data, robust GST collections, and strength in investment during the fourth quarter offer signs of a rebound. "On the urban consumption side, we are expecting a bit of a recovery because of the rate cuts and the tax slab changes," he said, adding that frequency indicators in rural areas also point to improving conditions.

Looking ahead, Goyal said the consumption story, particularly urban, should see directional improvement. "The quantum of the pick-up, however, remains to be seen," he said. He also highlighted the role of upcoming policy events, such as the pay commission in fiscal 2027 in supporting demand.

While acknowledging that some domestic observers may be underwhelmed by a 6.5% growth estimate, Goyal said India's performance stands out globally. "When we meet overseas investors, they ask, where do you even get 6.5%? Growth countries, growth companies get elevated valuations today compared to five or 10 years back," he said, noting that India's growth rate is significantly ahead of other sizeable economies.