Market Outlook: CIO’s Perspective on Alternates (Public Equity) | MOAMC
The year 2024 saw some challenges in the market, like a slowdown in consumption, high global interest rates, uncertain geopolitics, and inflated valuations in some mid and small cap stocks. Looking ahead to 2025, there’s hope for improvement on government spending and interest rates, which could ease these concerns. The next 12 months are expected to see the broader market’s multiples around 20x, slightly below the long-term average, with earnings growth projected at 12-13% in FY26.
Despite fluctuations in FII flows, there’s potential for increased foreign investment in Indian equities compared to other emerging markets. Anticipated growth in corporate earnings in the second half of FY25, coupled with declining geopolitical tensions, might attract more foreign investment. As global liquidity tightens, domestic and retail investor strength remains robust, consumer growth shows signs of recovery, and political stability continues, the Indian markets could be set up well for 2025.
India has vast opportunities in energy transition, EVs, electronics, manufacturing, and related industries. The government’s support in terms of clearances and infrastructure is crucial for the manufacturing sector to thrive. The prospect of looser fiscal and monetary policies could further stimulate economic growth.
Making profits in 2025 won’t be as straightforward as in previous years. It will require more focus on specific stocks and sectors. Sectors and companies linked to discretionary consumption, energy transition, electronics manufacturing, and capital markets are likely to perform better in this scenario.
