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Prolonged US-Iran conflict could cut earnings growth estimates in India
HDFC Securities CEO Dhiraj Relli expects FY27 earnings growth to still outpace FY26, but warns more geopolitical uncertainty could delay the earnings recovery.
LiveMint Markets reports that Dhiraj Relli, MD and CEO of HDFC Securities, says a prolonged US-Iran conflict could lead analysts to cut earnings growth estimates, even though he expects the overall earnings outlook for FY27 to be better than FY26.
Relli’s view links the earnings risk to market volatility tied to the West Asia conflict, including elevated energy prices, pressure on macro indicators, and foreign capital outflows that have weighed on the currency and forex reserves.
The outlet adds that conditions improved after de-escalation in the US/Israel and Iran war, with crude prices cooling and inflationary pressures easing, which helped stabilize the currency and moderate foreign institutional investor selling.
Despite that improvement, Relli expects heightened uncertainty to persist if the conflict escalates again, and he points to a potential improvement in the second half of calendar 2026, supported by improving sentiment, continued consolidation, and more reasonable valuation multiples.
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