US Investor feedback: India | Equity Strategy

研报英文原文证据摘录

US Investor feedback: India | Equity Strategy

beneficiaries 4.00.0 2.8 2.7 2.1

-0.4 -4.0

-3.2 -4.0of the AI-led earnings upgrade cycle (Samsung, SK Hynix, TSMC), India’s EPS growth still trails -8.0

-6.3 -7.6 -12.0

ITEMs, while valuations below the 10Y avg prem. The gap is expected to narrow in CY27E/ Care Parts) Estate Energy Banks Staples Telecom Durables Mining& Utilities& Internet& Real Auto Health NBFCs financials chemicals& Cons. cons.FY28E, it remains adverse for India. Historically, during periods of relatively lower earnings (incl. Metals Travel Mat. Industrials Autos Retail, Non-lendinggrowth (CY16–18), India’s valuation premium averaged close to 40%. This time, however, Building

strong domestic flows may partly justify elevated premiums. .Source: MSCI, Bloomberg, Jefferies.

Sector classification is Jefferies classification. Month-end

Weaker trend in INR. The INR has been among the weakest-performing major currencies, weights considered

declining by ~5% YTD in CY26 and ~13% cumulatively since Sep’24. The INR weakness is

primarily driven by subdued capital account flows (FY25-26 avg at ~0.3% of GDP, all-time low),

rather than the current account. Current year FY27 CAD is likely to be sub 2% of GDP - not a

concern. The recent easing in geopolitical risks / crude Oil prices, and govt. steps to raise FX

inflows (thru FCNR scheme - link) should support the INR. Importantly, following the correction,

the INR appears ~10% undervalued on REER terms, marking a ~12-year low.

El-Nino worries. As per the Indian Met. Dept. (IMD), the Jun–Sep 2026 monsoon is expected

to be deficient, with rainfall projected at ~10% below normal. Historically, inflation impact

from weak monsoons has been limited, also supported this year by healthy reservoirs after