Making money in 2025 will not be as easy & broad-based as in last 4 years
FinTech BizNews Service
Mumbai, 1 January, 2025: CY24 was influenced by a consumption slowdown, the peaking of global interest rates, geopolitical uncertainties and rich valuations in pockets of mid and small caps. CY25 is likely to bring some moderation in these concerns, especially on the government spending and interest rate front. 1 year forward multiples for broader markets is at around 20x, a tad below the long term averages. Broader markets are expected to grow earnings at 12-13% in FY26, as per the Market Outlook report authored by Vaibhav Agrawal, CIO – Alternates (Public equity), Motilal Oswal Asset Management Company (MOAMC ).
While the FII flows remain volatile, a pickup in corporate earnings in 2HFY25 and expected easing in geopolitical tensions post Trump joining office, could turn higher foreign flows into Indian equities vs other emerging economies (grappling with slowdown). With global liquidity tightening starting to ease, continued strength in domestic and retail participation, consumption growth likely likely having bottomed out, political continuity, government spending to be better in 2HFY25 and valuation correction from highs, here is a reasonable likelihood that the markets could be well-positioned for CY25.
India has huge headroom in many segments such as energy transition, capital markets, EVs, electronics, manufacturing and and their respective ancillary ecosystems. China and India were at the same GDP in. Today China is at USD 17 trillion and India is at 3.5 trillion. Government has huge role to play in creating the right ecosystem in terms of clearances and infrastructure for the manufacturing sector. Furthermore, loosening of both fiscal and monetary policy could help revive economic growth.
Making money in 2025 will not be as easy and broad-based as it has been in the last 4 years. It will be much more stock and sector specific. In that back drop we can think sectors and companies that have exposure to discretionary consumption, energy transition, electronics manufacturing and capital markets sectors may perform relatively better.
