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India’s benign inflation trajectory is setting the stage for a stronger earnings cycle ahead, according to Shridhar Sivaram, Investment Director at Enam Holdings.

Speaking at the Global Leadership Summit 2025, Sivaram said that low inflation has led to a lower nominal GDP, which in turn has contributed to muted earnings growth so far. However, he expects that to change as consumption picks up and inflation stabilises below 1 percent in October.

“Focus on consumption will drive earnings next year,” Sivaram said, adding that lower interest rates will help non-banking financial companies (NBFCs) clean up their balance sheets and improve credit quality.

He noted that with the Reserve Bank likely to maintain a supportive stance, the combination of lower inflation, stable rates, and resilient demand could set the tone for a broad-based recovery across sectors in 2026.