India's Growth Remains Resilient Despite Oil Price Pressures

Anil Rego, Founder and Fund Manager at Right Horizons, believes India's economic growth remains structurally resilient. However, he cautions that maintaining a quarterly growth rate of 7.5-8% may become challenging if oil prices stay elevated.

The domestic investment and consumption cycle remain strong enough to absorb some external volatility, Rego said in an interview with Moneycontrol. He expects a moderate slowdown rather than a significant drop in growth.

Rego's base case is for 12-15% earnings growth for FY27, which he believes remains achievable despite the headwinds. The composition of this growth will be crucial, and he sees an earnings recovery developing across financials, autos, industrials, capital goods, and selected consumer businesses.

The recent growth has been led by private investment, consumption, manufacturing, and financial services, which have grown 12%, 7.1%, 9.2%, and more than 12% respectively. Rego notes that the principal near-term vulnerability remains crude oil prices, which can transmit through the current account, inflation, currency, and eventually corporate margins.