Goldman Sachs has revised its rating on Indian equities to 'neutral' from 'overweight' in its Asia/Emerging Markets allocations due to expectations of a 'time correction' in the next three to six months.

The firm has also adjusted its 12-month target for the Nifty index to 27,000, noting that although strong domestic flows may prevent a 'price correction,' high valuations and a less favorable economic backdrop could limit potential gains.

Concerns about a slowdown in earnings growth are growing among analysts, with major brokerages such as Motilal Oswal Financial Services, Nuvama Institutional Equities, and Axis Securities predicting that Q2 earnings growth will reach a post-COVID low.

Profit growth for the July-September period is expected to significantly moderate to around 2 percent, marking the slowest earnings growth for Nifty companies in 17 quarters.

This decline follows a period of robust double-digit growth for Indian corporations over the past four years, indicating a potentially challenging road ahead.