By Chiranjivi Chakraborty

An estimated slowdown in revenue growth for India’s top technology companies is threatening to stall the relentless surge in the nation’s stocks, which were among Wall Street’s top emerging-market picks.

As investors await these results this week, a gauge of Indian tech shares has fallen for three straight weeks after rallying for the most part in 2023. The broader benchmark NSE Nifty 50 Index was also in the red so far this year after gaining 20 per cent in 2023.

India took the world by storm last year, powered by its fast economic growth, a growing middle class and rising manufacturing prowess as China falls out of favor. Its stock market value reached more than $4 trillion for the first time as global investors poured more than $20 billion into its equities on a net basis in 2023, most in three years. But there are signs that earnings may not grow fast enough to sustain the rally.

“There’s a lot of positivity that is being factored in but earnings growth in 2024 should moderate compared to last year due to margins compressing even as revenue growth picks up,” said Rajat Agarwal, Asia equity strategist at Societe Generale. “It does not look like that this is going to be a year of very strong returns for the market.”