Moderate Growth Ahead: Nifty Earnings Slated for 5% Rise in FY25

Nifty earnings are forecasted to achieve a modest 5% growth in FY25, marking the first single-digit rise in five years. The slowdown follows a robust CAGR of 21% over FY20-24, with challenges in H1 FY25, but expected recovery buoyed by rural spending and increased weddings in H2.

Nifty earnings are projected to grow by a modest 5% in FY25, according to Motilal Oswal's report, reflecting the first single-digit increase in five years. This moderation follows a strong annual growth rate of 21% between FY20-24, attributed to a slowdown in corporate earnings.

The report reveals that FY25 projections for Nifty earnings have been reduced by 5% since August 2024, indicating a slowdown in momentum during the first half. Earnings contracted by 1% YoY in 2QFY25, with Nifty-50 earnings increasing by just 4% YoY—the weakest in eight and 17 quarters.

Looking forward to the second half, a recovery is anticipated with earnings projected to rise by 9% YoY, driven by escalated rural expenditure, a vibrant wedding season, and enhanced government spending, highlighting both the immediate challenges and growth prospects.