In fact, earnings growth had been revised downward every year in the range of 5-15%. Among the key emerging markets, India was ranked the third worst performer after South Africa and Mexico, which have ‘over promised and under delivered’ on earnings growth in the last 15 years.There are a couple of reasons why earnings growth hasn’t picked up. The rate of growth of debt has been higher than the operating profit. In addition to this, growth in bank credit in FY17 stood at 5.1%, the slowest in over 60 years.The current fiscal year may offer good news for earnings: Nifty index earnings are expected to grow 14.7% and 16.9% for 2017 and 2018, respectively. The consensus earnings growth of the major indices in developed and emerging markets in 2017 is expected to be in high double digits.

Source: Economic Times May 15, 2017 18:11 UTC