Motilal Oswal Financial Services, projects a promising trajectory for Nifty companies, forecasting an earnings growth of 10-12% for FY25.

Despite a muted start to the year,  Gautam Duggad, Head of Research, Institutional Equities at Motilal Oswal, remains optimistic, citing this growth as moderate yet reasonable given the strong base of 30% earnings growth from the previous year and a four-year compound annual growth rate (CAGR) of 20% from FY20 to FY24.

Talking to CNBC TV18 in an interview, Duggad stated; “As far as the full year is concerned we are still quite confident that we should clock 10 to 12% earnings growth this year which depending on where you come from looks either very moderate or reasonably okay given that this 12% will come on a base of 30% earnings growth of last year and on a base of four year CAGR of 20% earnings growth between FY20 to FY24.”

Four years ago, Nifty’s total profits were 3.5 lakh crore, and the profits for 300 companies in their coverage universe were 4.3 lakh crore. Today, these figures have surged to 11 lakh crore for the coverage universe and approximately 8 lakh crore for Nifty.

Although the current quarter started relatively subdued, expectations are for improvement going forward. The anticipated growth for the next three quarters is around 5%, 15%, and 18%, respectively, leading to an overall projected growth of about 11% for the year.

Read Here | India stands out as an investment destination as it offers both scale and growth, says Motilal Oswal’s Rajat Rajgarhia

Feedback from Motilal Oswal’s

20th Annual Global Investor Conference underscores a robust macroeconomic outlook. Duggad highlights that corporates from diverse sectors, including financials, consumption, manufacturing, and commodities, have expressed a positive growth outlook. Particularly encouraging is the resurgence in rural areas, which has shown signs of improvement after a prolonged period of stagnation.

The conference also revealed that private capital expenditure (capex) is gradually gaining momentum. With the government having completed its major initiatives, Duggad anticipates a significant increase in private capex over the next 12 to 18 months.

Read Here | Gautam Duggad on why real estate developers should avoid quick, steep price hikes

Duggad identifies real estate as a standout theme over the past three years, with pre-sales experiencing a remarkable fourfold increase.  For investors with a higher risk appetite, Duggad recommends direct exposure to real estate stocks as a strategic move to capitalise on this trend.

Looking ahead, Duggad advises taking positions in consumer durables and cables and wires sectors, with KEI among the recommended names in the model portfolio. He also highlights adjacent themes such as ceramics and broader consumer discretionary sectors.

For those seeking to benefit from prevailing trends, Duggad’s strategy advocates for direct investment in real estate stocks to leverage the sector’s ongoing expansion.

For full interview, watch accompanying video

Also Read | The best yet to come for businesses like Zomato, says Raamdeo Agrawal