Expert view: Nifty 50 could deliver 16% earnings growth in FY25, and largecap 100 too, says Roop Bhootra of Anand Rathi

livemint.com:

Also Read- Expert View: Valuations are looking expensive for the market as a whole, says BNP's Kunal Vora On short term basis, generally markets are driven more by news, events etc. which are unpredictable and general volatility rises in the markets when frequency of these event increases. Its very normal for markets to correct 5-10%, having said that such fall has historically been bought into and market generally recovers in next two months post a fall.

In the last few months, and in first half of the FY25 we are exposed to many such events as elections are due, US Fed’s policy stance and related impact on fund flows, geopolitical crisis etc. But short term also looks calm right now and major events especially domestic are largely priced in while the global scene, is in balance and neither positive nor negative. I think investors should continue to remain invested in the markets and young investors especially should not get worried about short term volatility as they have time on their side which is one of the important factors in the creation of wealth.

Currently we believe SIP mode of investment should be preferred and wait for some fall if any for deploying lump-sum amount as per their preference. As far as Small and mid-caps are concerned, the rally witnessed in the last year or so in this space is driven more by superior earnings growth and less by multiple expansion. Multiples have also expanded but contribution in returns are more on back of earnings growth.

Nifty 50 is expected to deliver 16% earnings growth in 2024-25 and Nifty large cap 100 is expected to register similar earnings growth. However, earnings outlook for small caps still looks the best among all (large, mid, small) for 2025-26. Even if we assume