India’s corporate sector is preparing for a cautious and strategic 2025 2025 as macroeconomic headwinds, slowing revenue growth and global risks to market sentiment pressures. Although the country’s economic fundamentals remain strong, the sector has witnessed a significant difference in performance, according to Motilal Oswal Financial Services (MOSL). BFSI, healthcare and capital goods show resilience, while automobiles, real estate and consumers face headwinds, as appropriate.
According to domestic brokerage firm Motilal Oswal (MOSL), the latest version of the strategic voice emphasizes the company’s views on economic trends, sector changes and market positioning strategies for the coming year.
Company warns to prevail under macroeconomic headwinds
According to Moor, Indian companies enter 2025 with caution, balancing growth aspirations with economic reality. Public investment and domestic consumption continue to support expansion, but global slowdowns, supply chain disruptions and inflationary pressures remain major issues.
Key insights
Revenue slowdowns and market pressure
MOSL reported that company profitability is under pressure, with Nifty-50 earnings growth expected to be only 5% (YOY), down from a compound annual growth rate of more than 20% (CAGR) above 20%, Fiscal Year 20. twenty four. This decline is attributed to inflationary pressures, high interest rates and gentle consumer spending, all of which weaken revenue momentum.
Departmental Differences – Winners and Laggards
According to MOSL, the sectoral divide is becoming increasingly obvious. BFSI, health care and capital goods continue to show resilience and are supported by strong domestic demand and policy measures. In contrast, automotive, real estate and consumer discretion are coping with demand, cost inflation and margin pressures, limiting their near-term growth prospects.
Export-driven sectors face headwinds
Industry that rely on export services, chemicals and automobile exports are struggling due to global economic growth, supply chain challenges and pricing pressures. According to MOSL, the IT sector has traditionally been a growth engine, seeing weaker trading momentum and cautious customer spending. Meanwhile, chemical exports face pressure on lower global commodity prices and shortened international demand.
Capital expenditure cycle provides long-term growth potential
Despite these challenges, India’s capital expenditure (CAPEX) cycle remains a highlight, providing opportunities for long-term growth. According to MOSL, sectors such as railways, defense and renewable energy are seeing steady investments driven by government initiatives and private sector participation. These infrastructure-led sectors are expected to act as economic stabilizers, offsetting slowdowns in demand in other industries while supporting sustained expansion.
Department transfer: the power of some people, the pressure of others
The business landscape witnessed different sector trends, with some industries taking advantage of structural headwinds, while others struggling with demand contraction and cost pressures. Brokers noted that BFSI, pharmaceutical and capital goods are maintaining positive momentum while the automotive, metals and consumer discretion sectors are still under pressure.
BFSI – MOSL said the Banking and Financial Services (BFSI) sector continues to witness steady lending growth, but net interest margin (NIM) compression and asset quality issues remain major challenges. Non-bank financial companies (NBFCs) face rising capital costs that affect profitability. However, gold loans remain a highlight due to strong rural demand and rising gold prices.
Health care – The health care sector is experiencing steady domestic demand, especially in chronic therapies that are driving revenue growth. MOSL notes that generic drugs in the United States are under pressure due to erosion in pricing and fierce competition. The biomanufacturing sector is gaining traction, with the company focusing on contract development and manufacturing (CDMO) and biosimilars for long-term expansion.
Infrastructure and capital goods – According to MOSL, infrastructure and capital goods remain the main beneficiaries of public capital expenditures, especially in defense, rail and renewable energy. The industry witnessed a healthy inflow of order, with private sector capital expenditure expected to accelerate in Q4FY25, driven by Production Link Incentives (PLI) programs, industrial automation and strong domestic demand.
car – Even with electric vehicles (EVs), passenger cars and two-wheelers in the automotive industry are weak. Since Moscow, export markets have remained slow, demand in Europe is weak, and the United States has affected the production and sales prospects of original equipment manufacturers (OEMs).
Consumers and retail – The consumer and retail sectors face urban demand, while rural spending shows signs of early recovery. However, according to MOSL, higher input costs and weak consumer sentiment continue to put pressure on growth, leading retailers to adopt cautious expansion strategies in the near term.
Investment Strategy for 2025: Balanced Valuation, Growth and Market Risk
From a compound annual growth rate of more than 20% between fiscal 20-24, revenue growth drops to 5%, a stock-centric approach is key. According to Moos (MOSL), high valuations, global risks and heavy corporate profitability require investors to prioritize sectors with strong earnings visibility and sustainable demand drivers.
Departmental allocation strategy
Overweight sectors – consumption, BFSI, IT, industry, healthcare, real estate
Underweight Industry – Oil & Gas, Cement, Automotive, Metals
ICICI Bank, SBI – Strong loan growth and asset quality.
Bharti Airtel – Benefits from 5G adoption and ARPU growth.
L&T – Riding on infrastructure expansion and powerful orders.
Sun Pharma – Specialty drugs and chronic treatment needs promote growth.
Maruti Suzuki of Trent Titan – Take advantage of domestic consumption trends.
Hotels in India – Benefit from travel and tourism recovery.
Dixon Tech – PLI drives growth in electronic manufacturing.
Godrej Properties – Demand for housing in cities surges.
Kovge – Positioning for digital transformation and adoption of the cloud.
Page Industry – A strong demand for high-end clothing and casual sports.
Overall, as India enters 2025, the company sector faces a delicate balance between growth and macroeconomic challenges. According to MOSL, while some sectors such as BFSI, health care and capital goods are very stable, others such as other sectors (such as automobiles, real estate and discretionary consumption) are still under pressure to demand. The investment landscape requires a disciplinary approach, focusing on high-quality large hats, and choosing medium covers to effectively drive market risks.
With valuation increasing and global uncertainty persisting, Musser recommends investors adopt a sector-centric strategy to ensure long-term portfolio resilience.
Disclaimer: The views and suggestions presented above are those of individual analysts or brokerage firms, not mint. We recommend that investors contact certified experts before making any investment decisions.
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