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Inspite of the global indicators and domestic variables where the market has seen a lot of volatility in the previous months, the industry experts say that India’s long term growth story remains intact.
Here is what the industry experts think about what shaped the equity market in March 2025 and what we can expect in April 2025.
Amey Sathe, Fund Manager, Tata Mutual Fund
Economic indicators have shown mixed results in recent weeks but are noticeably better compared to a couple of months ago. In March 2025, the economy experienced a rebound in overall activities, driven by increased government spending, which is reflected in robust growth in steel and cement volumes.
However, consumption indicators remain uneven with auto sales and GST data showing inconsistencies.
How does April look like?
In April’25, the markets will closely monitor Jan-March quarter results. Also, tariff implementation may be another factor impacting the markets. We expect consumption recovery to get broad-based as the income tax cuts propel urban demand, coupled with the buoyant trend in rural consumption levels.
Within investments, we see public and household capex driving growth while private corporate capex recovers gradually.
Medium-term outlook
India's long-term story remains intact. India is likely to gain share in global output in the coming decades driven by strong foundational factors including robust population growth, a functioning democracy, macro stability influenced policy, better infrastructure, a rising entrepreneurial class and improving social outcomes.
We think the market is underestimating the impact of tax cuts for the consumer sector as well as RBI’s policy pivot (regulatory easing, rate cuts, liquidity boost, MFI relaxations etc.). Current Nifty valuations are close to the long term average which gives us a lot of comfort and supports a positive long-term return outlook.
Recommendation
Flexi Cap fund category is well suited for long term wealth creation.
Nikhil Rungta, Co-CIO Equity, LIC Mutual Fund AMC
In March 2025, Indian equity markets were shaped by a combination of global signals and domestic resilience. The US Federal Reserve reiterated its stance on expected rate cuts during the year, which reassured global investors and triggered a positive ripple across emerging markets.
A key shift was the return of Foreign Institutional Investors (FIIs) as net buyers after some profit-booking in February which helped drive fresh liquidity into the markets.
What does April look like?
As we move into April 2025, there are quite a few triggers that could shape the mood of the Indian equity markets. One of the big ones is the potential U.S. tariff action on Indian exports, expected to kick in from April 2. Any concrete move could impact sectors like pharma, textiles, and auto.
Further, with the Q4 earnings, the investors will be closely watching whether the recent growth momentum continues. Foreign investor activity will also remain a key driver. FIIs returned in March after a brief pause and if that trend holds in April, it could support the rally further.
Medium-term outlook
RBI’s monetary policy meeting will also be important. With inflation under control and growth holding up, there’s growing hope that the central bank might turn a bit more dovish — or even hint at a further rate cut. That would be great news for rate-sensitive sectors like autos, housing and NBFCs.
Globally, markets will keep an eye on economic data from the US and China, oil price movements and any fresh geopolitical tensions — all of which could sway sentiment. So overall, April looks like a month where earnings, policy and global cues will all be pulling the strings
Recommendations
We currently prefer sectors aligned with India's structural growth. Banking and financials look attractive due to strong credit growth and reasonable valuations. Capital goods and engineering, especially in defence and infrastructure are benefiting from rising capex.
Select plays in automobiles and midcap IT also look promising, provided one stays stock specific.
Shridatta Bhandwaldar, Head Equities at Canara Robeco Mutual Fund
Foreign Institutional Investors (FIIs) have been significant sellers in the Indian equity market over the past three months, with outflows amounting to $15-20 billion—an unprecedented figure.
What does April look like?
As the initial shocks subside, we expect FII flows to at least stabilize in the next quarter and eventually turn positive over time. For this to happen, our earnings will need to show substantial improvement from current levels.
We believe that the slowdown in earnings growth is more cyclical than structural, noting that a similar trend was observed in FY23.
Medium-term outlook
Valuations for the Nifty index are already below its 10-year average for one-year forward earnings. In the case of mid-caps and small-caps, they are now trading at just a 10% premium to their historical valuations.
Typically, periods of fear and disappointment in the market present opportunities to acquire quality assets at reasonable valuations. We believe we are nearing this zone and we suggest looking at the market with an 18 to 24-month perspective.
Recommendations
Currently, we are neutral to overweight on sectors like industrials, consumer discretionary, telecom, pharma, hotels, hospitals, aviation, and cement. Conversely, we are underweighting large financials, large NBFCs, commodities, oil and gas, and to some extent, FMCG and IT.
Trupti Agrawal, Fund Manager, WhiteOak Capital AMC
Supported by improving domestic macro data, March has been a relatively better month for equity markets. GDP grew by 6.2% in 3QFY25, picking up from 5.6% in 2QFY25. FII flows also improved substantially with US$2.7bn net inflows in the last week alone.
What does April look like?
Earning data for Q4 will be the major development to keep an eye on. Recovery in government spending, especially on the capex front will likely be a key monitorable.
Given the sub 4% CPI print, the conviction on a 25bps rate cut in April may have strengthened although uncertainties related to tariff measures announced by the President Trump along with geopolitical led disruptions pose headwinds to near-term outlook.
Medium term Outlook
Over the long term, markets worldwide have tended to deliver returns that are more or less in line with nominal GDP growth rate plus dividend yield. India’s nominal GDP growth rate is expected to be low double digits going forward and similar would be our expectation for the market return in rupee terms.
The key near term challenges at any point in time include any uncertainty related to evolving global geo-political situation, sharp reversal in global markets and any spike in oil prices.
Recommendations
Our sector exposure is an outcome of our rigorous bottom-up stock selection process. Having said that, at present time given our philosophy we find more opportunities in private sector financials, consumer discretionary, healthcare, IT services and certain segments within the industrials sector.
