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Morgan Stanley Says India Can Hit 12% Nominal Growth as Earnings Resume After Six-Quarter Slump
Economy
Published on 15 May 2026
Earnings bounced back after a six-quarter slowdown
Morgan Stanley believes India can lift nominal growth toward 12% even as a West Asia crude oil crisis squeezes the global outlook. The bank says earnings growth has already turned after a six-quarter mid-cycle slowdown and should improve further, supported by RBI and government reflationary steps such as rate cuts, bank deregulation, liquidity infusion, and targeted capex in energy, defence, semiconductors, fertilisers, and data centres. Challenges remain, including limited direct AI exposure for equities and AI disruption risks for services exports.
- Morgan Stanley sees earnings growth returning after six quarters
- Reflation policy support could help sustain the pickup
- Capex drivers cited include energy, defence, semiconductors, data centres
- India’s oil intensity is lower, but oil imports remain required
- Report highlights limited direct AI play as a persistent equity challenge
- Fuel duty hikes of Rs 3 for petrol and diesel were announced
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This summarization was done by Beige for a story published on 
Republic