India’s equity markets, long buoyed by strong economic growth and rising corporate earnings, are now facing a sharp and prolonged correction. The Nifty 50’s nearly 13 per cent decline from its September 2024 peak ~ steeper than broader Asian and emerging markets ~ signals deeper structural concerns. Slowing corporate profits, moderating economic growth, and persistent foreign outflows are creating headwinds that investors can no longer ignore. A key trigger for the current market decline is the sharp deceleration in corporate earnings growth. After two years of double-digit expansion, Nifty 50 companies reported just 5 per cent growth in the October-December quarter ~ the third straight quarter of single-digit gains.

The reasons are evident: tepid urban demand, elevated inflation, and sluggish income growth. These factors have stifled consumption, particularly in discretionary spending sectors. This is not a short-term blip. Brokerage firms are already lowering full-year profit estimates for over half of........

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