India Market Update – February 2024

Key Takeaways

  • GDP Growth: India continues to remain the fastest growing economy as it expanded more than 8.4% in the last 3 months of 2023, compared to a year earlier. GDP growth came in for 3QFY24 at 8.4% YoY, a 16-month high. India’s economy has overall performed well, and stronger-than-expected data in 2023 has seen positive revisions of GDP forecasts in H1FY24.1
  • Corporate earnings remain strong: Nifty 50 Index company earnings have grown at a 20% CAGR over FY20-24.2 3QFY24 corporate earnings ended on a strong note with positive results from Auto (Tata Motors, M&M, Bajaj Auto) and Financial (HDFC Bank, ICICI Bank) sectors as key drivers.
  • India’s cyclical upturn, strong capex cycle, robust demand, and expected interest rate cuts in second half of 2024 are key catalysts for Indian companies to deliver healthy earnings growth in the next financial year.

Domestic Macros

  • Real GDP Growth (%): From being the 9th largest economy a decade ago, India has now become the 5th largest economy with a nominal GDP of US$3.4tr. India is not only projected to grow at a faster rate over the next 5-years, the country will also be a standout in a world where most large economies are expected to see their growth rates decline.3

  • Lower corporate leverage makes GDP growth sustainable: India’s GDP growth of over 6% over the last decade has come with reducing leverage, a unique trait among high growth emerging market nations. India’s corporate sector has also seen its Debt-to-Equity ratio reduce from close to 1.0x in FY15 to less than 0.5x in FY24. Low leverage makes the corporate sector well placed to drive growth through investment and capacity addition.
  • Boosting manufacturing sector: India’s manufacturing sector continued its recovery in February 2024 from a 12-month low in December 2023. Production levels and sales have been rising at the fastest pace in five months. Production growth also continued to be strong, supported by both domestic and external demand. Manufacturing margins improved as input price inflation slipped.

  • GST Collections: Over the last 6 years since its rollout, the tax collections under GST have risen consistently. GST collections for January 2024 (collected in February 2024) was at US$20.2 Bn, up by roughly 12.5% on an annual basis. With this, India’s monthly GST revenue has remained over US$18.1 Bn for 12 consecutive months.

  • Consumer gearing is also low: From a broader consumer balance sheet perspective, India’s overall household credit to GDP is also among the lowest at ~40% of GDP. This leaves higher discretionary income in the hands of Indian households to drive consumption and also represents a potential to lever up over the medium to long term.

Nifty 50 Index EPS Growth Trend

Corporate profitability has surged post COVID-19 with earnings for the benchmark Nifty 50 Index growing at a 20% CAGR over FY20-24.4 There are several factors which are expected to sustain this high EPS growth in the near future. (a) the banking sector’s strong balance sheets combined with high loan growth; (b) Property market upswing after a decade of mediocre growth; (c) Energy companies are expected to benefit from higher industrial demand; (d) consumer discretionary spending supported by strong consumption and premiumisation across a rising middle class.

The above is performance of the Index does not in any manner indicate the performance of any individual scheme of Mutual Fund. 



India has shown more robust and consistent earnings performance compared to other emerging markets/major economies. The Nifty 50 Index is at a reasonable valuation of ~20x on FY25 earnings with a stable earnings growth outlook. As double-digit earnings growth continues to unfold amid a resilient economy and consistent domestic flows, the Nifty 50 Index PE is likely to be sustained in the long run. In Price-to-Book terms, Nifty 50 Index has also seen consistent re-rating with current valuations coinciding with the decadal higher ROEs of corporates.5

Related Funds

NDIA: The Global X India Nifty 50 ETF (ASX: NDIA) invests in 50 of the largest companies listed in India.


Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 20/03/2024. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.