Indian Stocks Expected to Deliver Modest Returns in 2025 Amid Earnings Concerns and Hiring Increase

Indian equities are anticipated to face challenges in 2025, with expectations of modest returns due to concerns over corporate earnings and high valuations. Analysts highlight a potential weakening in corporate earnings, which could dampen the current unprecedented winning streak of Indian stocks. Despite these concerns, Goldman Sachs strategist Timothy Moe notes that Indian equities may be more resilient compared to other global markets, as India possesses stronger domestic economic engines than trade-oriented economies like China, Japan, Korea, or Taiwan. The fundamental growth story of India remains promising, although uncertainty around earnings growth persists. Additionally, there are indications that Indian companies are planning to increase hiring in the first quarter of 2025, and the pharmaceutical sector is expected to perform well according to HSBC. The overall outlook for 2025 includes discussions on fiscal targets, Q3 earnings, and consumption trends, suggesting a complex but potentially positive economic landscape.