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BUSINESS & TRADE JANUARY 10, 2025 | The Indian Eye 38

LOOKING FORWARD 2025

Corporate earnings to witness a rise as Govt

focuses on GDP growth in upcoming budget

The Economic Survey tabled in Parliament earlier this year “conservatively” projected India’s real

GDP growth at 6.5-7 per cent for 2024-25, acknowledging that market expectations are higher

OUR BUREAU Union Finance Minister Nirmala Sitharaman chairs the seventh Pre-Budget Consultation with the stakeholders from the financial
New Delhi sector and capital markets in connection with the forthcoming Union Budget 2025-26 in New Delhi on Thursdays (ANI)
ndian corporates are expected to witness im-
proved earnings in upcoming quarter which will Banking & Financial Services given the reasonable and Department of Financial Services, and Chief
Idrive in returns in the new year, stated the Mi- valuations and higher return ratios - ROE (Return Economic Adviser to the Government of India.
rae Asset Mutual Funds stated in its Annual Mar- on Equity) and ROA (Return on Assets). The Finance Ministry conducts several
ket Outlook 2025 report. However, the report high- “We are also hopeful of revival in consumption and pre-budget consultation meetings annually with
lighted that despite higher valuations at the start of positive on manufacturing given the Government’s experts, industry leaders, economists, and state of-
the year, equities did well with mid and small caps thrust and China+1 strategy,” the report added. ficials. The formal exercise to prepare the annual
delivering double digit returns. Year 2024 was a year of elections with more Budget for the next financial year has already begun.
It added that the stocks are still the favorite in- than half of world’s economy by GDP and popu- Sitharaman has so far held a series of meetings
vestment choice in the markets because they have lation undergoing election including India and US. with various stakeholders, including with MSMEs,
the potential for good returns, but it’s important to While India is broadly seeing policy continuity, it farmers’ associations, and economists.
have a mix of different types of investments (stocks, would be interesting to watch out for policies adopt- Prime Minister Narendra Modi also interacted
bonds, etc.) to reduce risk. ed by the new administration in US particularly on with a group of eminent economists and thought
The report added that India’s medium to long trade, immigration, deregulation, taxes and govern- leaders in preparation for the Union Budget 2025-
term outlook remains robust driven by strong macro ment expenditure. This will have a bearing on trade 26 at the NITI Aayog premises last week.
fundamentals deleveraged corporate balance sheets, and financial markets globally, the report added. This upcoming budget comes in the backdrop
robust asset quality, fiscal discipline, favorable de- Indian capital markets saw a record surge in of weak GDP numbers and weak consumption in
mographics, digitization, rising income levels, etc. primary equity issuances while domestic investors the economy.
Household debt levels are also reasonable continued to be big buyers in secondary market. The Reserve Bank in its latest monetary policy
compared to global standards. India’s aggregate Foreign Portfolio Investors (FPI), on the oth- had cut India’s growth forecast for 2024-25 to 6.6
debt to GDP is lower than in 2010, while it has risen er hand, have remained on the side lines owing to per cent from 7.2 per cent. The Economic Survey
globally, the annual market report added. “We re- their discomfort on higher valuations. tabled in Parliament earlier this year “conserva-
main constructive on equities from a medium-term Any significant correction in Indian equities tively” projected India’s real GDP growth at 6.5-7
perspective driven by strong profitability and free may lead to Foreign Portfolio Investor (FPI) in- per cent for 2024-25, acknowledging that market
cash flows. Earnings growth may be a key driver of flows going ahead, the report added. expectations are higher. Real GDP growth is the
returns in 2025. Given that valuations are trading Meanwhile, Finance Minister Nirmala Sithara- reported economic growth adjusted for inflation.
at a premium and there is froth in certain segments man on Thursday met stakeholders from the finan- India’s GDP grew by an impressive 8.2 per cent
of the market, bottom-up stock selection will be im- cial sector and capital markets as part of her series during the financial year 2023-24, and continued to
portant,” the report added. pre-Budget consultations. The meeting was also be the fastest-growing major economy. The econo-
On the Sectoral front, the report expressed its attended by Finance Secretary, DIPAM secretary, my grew by 7.2 per cent in 2022-23 and 8.7 per cent
confidence, adding that it remains constructive on and secretaries of Department of Economic Affairs in 2021-22.

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