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Bajaj Life CIO expects double-digit returns from Indian equities
He links the outlook to an anticipated recovery in corporate earnings, with Nifty 50 earnings expected to grow about 15% CAGR over the next two years.
Bajaj Life Chief Investment Officer Srinivas Rao Ravuri expects Indian equities to deliver healthy double-digit returns over the medium term, arguing that markets often look past near term uncertainties to improving fundamentals. In an interview with LiveMint, he said Nifty 50’s muted performance over the past two years reflects consolidation rather than a structural change in the market’s path.
Ravuri pointed to earnings growth that moderated to single digits during FY25 and FY26, with investor sentiment and capital flows affected by heightened geopolitical uncertainties and a global preference for AI driven markets. He noted that geopolitical risks have eased somewhat, and that the exceptional run in global AI related stocks appears to be moderating.
Consensus estimates cited by LiveMint suggest Nifty 50 earnings could rise by around 15% compound annual growth rate over the next two years, supported by improving domestic demand, moderate inflation, lower interest rates, and continued policy support. Ravuri also said valuations are closer to the Nifty 50’s long term average, making the market more attractive from a medium term perspective.
He added that past episodes of subdued returns in Indian equities were followed by phases of strong wealth creation, with consolidations helping reset valuations. Ravuri said long term growth drivers remain intact, including favorable demographics, formalisation of the economy, rising financialisation of savings, and sustained reforms.