Earnings slowdown to persist, but Q3 expected to see improvement: Nitin Raheja
«But Q3 is going to be better. But the earnings slowdown is probably going to take a couple of quarters to wear out. What has really happened is there has been this little bit of a change that we have seen,» says Nitin Raheja, Julius Baer Wealth Advisors.
Hope 2025 is bigger, better, brighter for you as well as the markets. But is that the base case scenario because last year we saw gains of almost 9% on Nifty, but it was the smallcap and midcap indices which were up over 20-25%. Is it going to be another year where smallcaps and midcaps outperform massively or do you think there is room for largecaps to catch up?
Nitin Raheja: So, what you have sort of highlighted is correct. I mean, last year was a pretty much of an anomalous year where the largecaps underperformed dramatically while the mid and smallcaps actually gave almost 70-80% outperformance vis-a-vis the largecaps.
And I think that has largely got to do with the fact that you have huge FPI flows that have been taking place. We had the single largest FPI flows in a year, but it is sort of a testimony to our markets that despite this kind of flows we held up and we yet ended up delivering positive returns and it was around 10% for the large and 17-18% for the mid and small.
And broadly this year is going to be equally challenging, at least the first half of the year is going to be pretty challenging because we have earnings slowdown that we are seeing, which we saw in Q2. Q3 will be better considering that we had all the festivals in that period, so
