Revealed: Shocking Forecast of Weakest Corporate Earnings in Five Years for FY25 by Motilal Oswal
New Delhi [India], November 29 (ANI): Nifty earnings are projected to experience modest growth of 5% in FY25, marking the first instance of single-digit growth in the past five years, as reported by Motilal Oswal. The report attributes this slowdown to a moderation in corporate earnings after a period of robust growth. Since August 2024, Nifty EPS estimates have been reduced by 5%, reflecting subdued expectations for FY25.
During FY20-24, corporate earnings saw a remarkable compound annual growth rate (CAGR) of 21%. However, the momentum has dissipated in the early half of FY25. In the July-September quarter (Q2FY25), companies covered in the analysis experienced a 1% year-on-year (YoY) contraction in earnings growth, while Nifty-50 earnings slightly rose by 4% YoY. This represents the weakest earnings performance in 8 and 17 quarters, respectively.
Excluding global commodity sectors, earnings growth appeared relatively stronger at 12% for the companies covered and 11% for the Nifty-50 within the same period. Despite a tepid first half, the report forecasts a recovery in corporate earnings during the second half of FY25, with an anticipated 9% YoY growth, compared to flat growth in the first half.
The recovery is expected to be driven by increased rural spending, a vibrant wedding season with 30% more weddings YoY, and heightened government expenditure. “We expect corporate earnings to recover in 2HFY25, aided by a rise in rural spending and a buoyant wedding season,” the report stated.
Motilal Oswal’s analysis underscores the evolving trends in corporate earnings, noting both the challenges and growth prospects in the near term. This outlook offers insight into the broader economic activities and the factors shaping corporate performance as businesses navigate the current fiscal landscape.
Original Story https://www.livemint.com/news/weakest-5-pc-corporate-earnings-in-last-five-years-forecast-for-fy25-by-motilal-oswal-11732852168073.html
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