Helios Capital’s Samir Arora predicts a potential turnaround for Indian equities, forecasting 14-15% earnings growth. While he sees relief from shifting US trade policies and domestic tax reviews, investors are still navigating a challenging 2026 marked by significant foreign institutional outflows and tax regime concerns.
Market strategist Samir Arora, founder of Helios Capital, has highlighted a potential shift in the narrative for Indian equities, suggesting that the market may be nearing a turning point after a difficult period. He projects that rupee-denominated corporate earnings growth could reach 14% to 15%, which would translate to approximately 11% in dollar-denominated terms. This return profile is key for global investors who, until now, have seen currency depreciation erode much of their gains in the Indian market.
Arora attributes this expected improvement to a combination of geopolitical and domestic factors. He suggests that the recent shifts in United States political leadership may lead to a more favourable trade environment for India, potentially easing past hurdles related to tariffs and visa restrictions. Additionally, he notes that the Indian government’s efforts to review and stabilize taxation frameworks for investors are essential for rebuilding confidence. The core argument is that if the currency remains stable and earnings growth hits these targets, India can once again compete effectively for global capital allocations.
However, this optimistic outlook comes against the backdrop of a demanding market environment in 2026. The year has been characterized by intense volatility, with foreign portfolio investors (FPIs) withdrawing approximately Rs 3 lakh crore from Indian equities. This heavy selling pressure has been driven by a mix of global macro headwinds, including elevated crude oil prices and shifts in US Treasury yields, which have made other global markets more attractive by comparison.
One of the most persistent risks flagged by international investors is the uncertainty surrounding the capital gains tax regime in India. Arora emphasizes that consistency in policy is critical. Any reversals or unexpected changes in these tax initiatives could unsettle institutional investors and negate the positive sentiment gained from recent fiscal adjustments. While trade dynamics, such as progress on free trade agreements with the UK and the EU, could help broaden India's export base and reduce import bill volatility, the market remains sensitive to global liquidity shifts.
For investors, the immediate future will depend on whether corporate earnings can actually deliver the anticipated 14-15% growth. Market participants are also likely to monitor closely the stability of the rupee, the consistency of fiscal policies, and the flow of foreign funds. The transition from a defensive market position to one driven by sustainable domestic earnings will be the key trend to track in the coming quarters.