Viktor Shvets, Head of Global Desk Strategy at Macquarie Capital, believes India’s earnings per share (EPS) for the financial year ending in March 2025 will be around 11%-13%, lower than market estimates of 16%-18%.

Shvets expects the US dollar to start the year much stronger, but weaken by the year-end. Although the dollar is very strong right now, he believes it’s unlikely that the dollar index (DXY) will inch above 115, as that would require major global disruptions, which is unlikely despite all the current uncertainty.

For India’s economic growth to reach 8%, Shvets believes capital efficiency will need to improve significantly, with improvements in domestic productivity, especially in agriculture, and public sector performance.

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Macquarie Capital sees some space for the US Federal Reserve to lower interest rates. After factoring in the real interest rate of 1% and expected inflation, they expect US rates to likely settle around 3.5% levels.

While there is no clarity yet on Trump tariffs, Shvets believes the US president is likely trying to do three things: use it as a negotiation tactic to get a better deal for US companies, indicate to his supporters his intention to work hard for the American people, or a genuine attempt to shift global savings, investments, and spending.

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