Market To Face Challenges In H1 2025 But Some Companies Will Outperform: Axis AMC CIO

The first half of calendar year 2025 is expected to remain challenging for the Indian stock markets, although certain companies will outperform, according to Axis Asset Management Co.’s Chief Investment Officer Ashish Gupta.

“We expect that the first half of the calendar year will continue to be challenging. There has been a moderation in earnings growth momentum, along with the economic slowdown," Gupta said, while speaking to NDTV Profit.

Global factors, particularly US yields going up again and foreign outflows continuing, will also weigh on the market, he said. "At least in the first half, we see these trends continuing.”

During this time, the “dispersion in markets” will increase, the Axis AMC CIO noted. If macro conditions are not favourable, then a number of companies and sector would not do well, he added.

However, Gupta did point out a few sectors that may outperform. “There will be more specific companies that will outperform. Sectors like real estate, EMS, and travel continue to do well,” he said.

“Unfortunately, I don't see them to be very large components of the total market,” Gupta added.

The top executive further highlighted that analysts’ focus is now on the third quarter earnings season.

“The only positive here is that we are going into the earning season with muted expectations, because the estimates are that in this quarter as well, earnings growth for the market will only be to the tune of 5-6%,” he said.

Gupta projected a flat earnings trajectory across multiple sectors. 

“Some of the key sectors like auto, banking, cement, which are more domestically driven, will also put flat earnings growth,” he said.

Gupta hopes that in the second half of 2025, the earnings growth may come back into the double-digit mark to “support the market better”.