Invesco CIO Warns Nifty Faces 8% Drop on Lowered Earnings Forecasts

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Overview

Taher Badshah of Invesco Mutual Fund forecasts a potential 7-8% decline for the Nifty, citing a significant cut in FY27 earnings growth expectations from 13-15% to 6-7%. He warns of further downside if conditions worsen. Badshah also indicated a constructive outlook for the IT sector, seeing value opportunities.

Earnings Forecasts Slashed

Taher Badshah, Invesco Mutual Fund's Chief Investment Officer, sees a major cut to earnings growth forecasts for fiscal year 2027. Expectations have fallen from 13-15% to around 6-7%. Badshah cautioned that ongoing inflation and global uncertainties could reduce growth further, possibly to near zero if conditions worsen.

Nifty Faces Significant Drop

This shift in earnings forecasts points to significant downside for market valuations. Badshah expects the Nifty index to fall another 7-8%. He warned the broader market could slide as much as 10% before finding a bottom. While March quarter results should be stable, pressure is likely from the June quarter onwards, particularly if energy prices keep rising.

Invesco Sees Value in IT Sector

These challenges are expected to hit harder in the second half of 2026. However, Badshah offered a more positive view on the Information Technology sector, contrasting with the general market caution. He observed its recent gains following a sharp drop and highlighted Invesco's interest in the sector for its value potential, even amidst the AI-driven market sell-off. The IT sector could see gains from a natural rebound and its low exposure to current geopolitical conflicts.

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