(Bloomberg) -- India’s stocks have powered ahead in recent months as surging earnings outweighed fears about lofty valuations. That dynamic is at risk with companies forecast to report slowing profit growth.

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Brokerages predict that companies in the benchmark NSE Nifty 50 Index will either report flat or low single digits profit gains for the quarter ended September. Earnings may expand at the slowest pace in more than four years, Jefferies Financial Group Inc.’s analysts forecast for their coverage universe excluding oil and gas.

The benchmark gauge has dropped almost 3% in October, paring the year’s gains to over 15%. That’s fueling speculation it may have topped out in September following a stellar run, before an exodus of global funds toward China. The earnings slowdown is being driven by weakening consumer spending and increasing commodity prices.

“There is a visible loss in macro momentum,” said Rajat Agarwal, an Asia equity strategist at Societe Generale in Bengaluru. “We are clearly seeing a downside risk to consensus estimates, and that can weigh on the market at these valuations.”

Analysts at Sanford C. Bernstein & Co. and Macquarie Capital Securities echo that view. Such forecasts augur ill for the high-flying stock market. The MSCI India Index is down 2.6% in October, following a record 11-month winning run.

Macro-economic data are painting a bleak picture. India’s goods-and-services-tax collections grew at the slowest pace in more than three years in September, while passenger-vehicle sales fell nearly 19% from a year earlier. Power demand shrank in August versus a year ago, and both manufacturing and services purchasing managers’ indexes dropped.

The signs were evident from first-quarter results, which brought more misses than beats.

The latest reporting season that kicked off on Oct. 10 is proving disappointing, with net income for Mukesh Ambani’s Reliance Industries Ltd. and Tata Consultancy Services Ltd. — which leads a $250 billion Indian industry that helps corporate clients adopt automation, cloud computing and artificial intelligence — falling short of estimates.

Overseas investors have cut their holdings of Indian equities by more than $7 billion this month, set for the biggest monthly outflow since the record set in March 2020. Those funds are at least partly being redirected to China, where stocks have surged since late-September on the back of fresh stimulus measures.