GQG holds over $24 billion in India as ‘perfect storm’ for stocks eases

Foreigners pulled about $19 billion from stocks last year, a trend that has continued in 2026, as lackluster corporate earnings, tensions with the US and a weak rupee dented sentiment

• GQG Partners bets on Indian banks to lead earnings recovery despite stock lag
• US trade deal and rupee support boost investor sentiment for Indian equities
• GQG portfolio manager sees top opportunities in banks, infrastructure, telecom

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The steepest underperformance of Indian stocks in decades isn’t deterring GQG Partners LLC as it bets on banks to lead a recovery in earnings.

Corporate earnings growth should accelerate back to the mid-teens, following a five-quarter slowdown where Indian equities lagged behind emerging-market peers, according to Sudarshan Murthy, a portfolio manager at GQG.

“India was going through a perfect storm” of tariff worries, currency weakness, soft earnings and money rotated out of India to markets with more prominent artificial-intelligence plays, said Murthy. But he’s confident that will change. “For every dollar invested in China, we have about nine times that in India.”

New York-based GQG, which has more than $24 billion of its $166 billion total assets under management in India, is an outlier among international investors. Foreigners pulled about $19 billion from stocks last year, a trend that has continued in 2026, as lackluster corporate earnings, tensions with the US and a weak rupee dented sentiment.

But things are looking up. A trade deal with the US has eased concerns and supported the rupee. Investors may view India as a refuge if AI-stock valuations come under question. And Jefferies sees the highest proportion of earnings upgrades in the current season than anytime in the past seven.

GQG Partners holds ICICI Bank Ltd. and State Bank of India Ltd. in its emerging markets portfolio, according to filings. It also held telecom-provider stock Bharti Airtel Ltd. and infrastructure-linked companies including Adani Enterprises Ltd., Adani Green Energy Ltd. and JSW Steel Ltd.

GQG attracted attention for a bet on Adani-group stocks in 2023 just after a short seller issued a scathing report on the group that tanked shares. GQG’s investment grew more than fivefold in the next year. But its overall record is mixed — the Goldman Sachs GQG Partners International Opportunities Fund’s five-year return ranks in the 56th percentile among peers, according to data compiled by Bloomberg.

Banks, infrastructure and telecommunications are among the most attractive opportunities now, according to Murthy.

“Banking sector growth has picked up,” Murthy said. Credit quality remains good and “even the best banks are available at valuations that can be justified given its long-term trajectory,” he said. Lenders, which command a large weighting in the NSE Nifty 50 Index, have potential to lead a recovery in stocks, he added.

As India’s economy continues to grow, there is going to be a lot of need to build out infrastructure, he said. “Companies like Adani Green keep executing — they have over 17 gigawatts of capacity from about 11 gigawatts last year. You build this capacity and revenues are mainly long term contracts, so there is a lot of visibility.”

As for GQG’s overall approach, “we try to get a sense of what’s going to be the earnings growth over the next five years, and whether that make sense for the given valuation,” Murthy said. In that context, “India has among the best earnings growth anywhere in the world over the long term.”