Stable local demand boost Q4FY23, yet external factors pose challenges for FY24

As Q4 GDP growth exceeds expectations, India looks to achieve a GDP growth rate of 7.2% in FY23, raising hopes that its FY24 growth will soon exceed 7%. However, the country will have to contend with the expected global slowdown which could negatively impact India’s growth prospects. Corporate earnings in India have been buoyed by private consumption, service, exports, and manufacturing but the global demand slowdown may impact its revenue growth for FY24. Small and mid-cap stock prices have been buoyed by a resurgence of retail investor inflows, while broad valuations remain above long-term averages.