October 16, 2025

After a full year of calm and slow gains, India's stock market looks ready to sparkle again in 2025. Rajesh Bhatia, Chief Investment Officer at ITI Mutual Fund, says the market did its "time correction" and is now set for a fresh burst of growth. Why the quiet patch? Bhatia explains, "The fiscal deficit had to contract, and that was good policy discipline," which slowed growth for a while but was necessary. The good news is, this phase is ending. "We are close to bottoming out as far as earnings are concerned," he says. Factors like GST cuts, lower interest rates, and tax breaks for the middle class are turning the earnings cycle positive again. The Reserve Bank of India's 100 basis points rate cut and solid liquidity also pave the way for a happy earnings journey into FY27. But wait, what could still slow this party? Bhatia points to the hefty 50% tariffs on Indian goods abroad. "Even if those tariffs were reduced to 25%, that’s still high but acceptable — and would be the spark our markets need to break out," he shares. He’s hopeful that if tariff talks ease soon, the Nifty could zoom to new highs in 2025 itself. On the investment side, domestic big investors and retail buyers have been the steady heartbeat of the market, even as foreign investors (FIIs) pulled out over the past three years. "My sense is that FIIs could turn positive again next year," Bhatia predicts, especially as they chase global AI trends and then spot India’s growing momentum. Here comes the exciting part: digital commerce! "Food delivery, quick commerce, payment platforms, and insurance intermediaries are moving from a narrative to a high-growth phase," Bhatia says. These sectors are becoming profit powerhouses, creating wealth for the next 2-3 years. Even in slow-expanding areas, they're winning market share — now that’s real magic! Telecom also shines bright. With only a few big players left, doubling of average revenue per user (ARPU), and shrinking capex cycles, the telecom sector is poised for big profit jumps, thanks to expected tariff hikes. Wrapping up, Bhatia is upbeat: "If tariffs are reduced, the macro setup is perfect. Earnings are set to expand again, and new highs are likely in 2025 or early 2026." So, folks, India’s stock market may just be gearing up for its biggest dance in years. Buckle up!

Read More at Economictimes →

Tags: Indian equity market, Rajesh bhatia, Earnings rebound, Tariffs, Nifty 2025, Digital commerce,