HSBC analysts have downgraded Indian stocks from 'neutral' to 'underweight,' according to a report released on April 23 by Jin10. Despite a significant correction from peak valuations, the analysts believe that Indian companies' valuations may remain elevated until the full impact of lowered earnings expectations is realized. The report forecasts a reduction in the current average earnings expectation of 16% for 2026. Analysts expressed concerns about the sustainability of the current earnings recovery, citing India's reliance on imported energy and the potential ripple effects on inflation and domestic demand.