ETMarkets Smart Talk: Top 3 reasons why we expect double-digit growth in FY2025 in stock market: Deepak Ramaraju

economictimes.indiatimes.com:

“The market valuation of NIFTY is priced to perfection. The NIFTY is trading at 20.75x FY 25E (P/E) and 22x on a trailing basis,” says Deepak Ramaraju, Senior Fund Manager, Shriram AMC.

In an interview with ETMarkets, Ramaraju said: “However, any surprise in the election outcome like a non-decisive mandate can be negative to the markets,”. Edited excerpts:

We have closed FY24 with double-digit gains. How do you see markets in FY25?

We are expecting double-digit growth in FY 2025. This is supported by:

• Stable macros –

The inflation is trending lower gradually and is below the 10Y benchmark yield. We are expecting a rate cut in the second half of CY 2024.

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The demand environment is strongly driven by strong government spending, narrowing the fiscal deficit, fiscal prudence maintained by the government, strong GST collection and stable PMI data.

• Strong Corporate Earnings –

The FY25E EPS is expected to grow by 12% to Rs. 1060. This growth in EPS is primarily driven by the strong demand environment.

As global inflation is trending lower, we can expect the export demand to improve further from here, which will have a positive impact on corporate earnings.

• Fair Valuation –

The market valuation of NIFTY is priced to perfection. The NIFTY is trading at 20.75x