India’s macros remain robust, long-term growth prospects steady: Report

Published 15-01-2025, 07:18 pm
© Reuters.  India’s macros remain robust, long-term growth prospects steady: Report

New Delhi, Jan 15 (IANS) India’s macros (like fiscal consolidation, strong balance sheets and recovery in consumption) remain robust amid slowing global growth and the country's long-term growth prospects remain steady, projected at 6.5 per cent real GDP growth and 10-11 per cent nominal GDP growth, according to a report on Wednesday.The strength of banks (NPAs below 1 per cent) and corporate balance sheets is notable. India Inc.’s profits are growing strong, but they are also generating large amounts of free cashflows in sharp contrast to 2003-2008, where free cashflows were in deficit, according to the monthly insight report from global financial services company Mirae Asset.

Household debt levels are also reasonable compared to global standards. India's aggregate debt to GDP is lower than in 2010, while it has risen globally, the findings showed.

"The Nifty 50 Index's valuation at 19 times FY26E and 17 times FY27E P/E is reasonable given the consensus earnings growth of mid-teens CAGR over FY23-FY27. Earnings growth is broad-based, providing better certainty,” the report mentioned.

"Some sectors, particularly among industrials, continue to trade at a premium. Mean reversion is expected in these richly valued sectors,” the report noted.

Meanwhile, agriculture is likely to see a further revival as the kharif crop and price outlook are favourable. The upcoming rabi crop is also likely to be positive.

The total farm area sown in the country under various rabi crops in the ongoing season so far has increased to 632.3 lakh hectares, up from 631.4 lakh hectares in the same period of the previous year, according to the latest government data.

Government capex is likely to pick up in H2 FY25. Rural consumption could offset the softness in urban consumption, and this too presents a positive picture with the ongoing harvest and commencement of the next season, according to the report.

“We also expect the state government’s welfare spends will support consumption recovery. Monetary policy stimulus could also help in reviving growth in the near-medium term,” it added.

Overall, while near-term concerns have risen and could weigh on investor sentiments, the medium to long-term India story remains intact, the report noted.

--IANS

na/vd

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.