Expert view: Pranav Haridasan, the MD (Managing Director) and CEO (Chief Executive Officer) of Axis Securities, believes stability may return to the Indian stock market from Q3 onwards due to improved liquidity, lower inflation and the government’s measures. In an interview with Mint, Haridasan said he expects the broader market to deliver better returns over the next 12 months. Here are edited excerpts of the interview:
When do you expect the Indian stock market to stabilise? What can comfort the market?
The market has had a strong run and is now pausing for breath — that’s natural and healthy. Earnings have been broadly in line, though guidance has been a little muted, which is why we’re seeing this consolidation.
What comforts me is that the macro backdrop is still strong: liquidity has improved, inflation is easing, and the government has front-loaded support through tax relief and capital spending.
Once these start showing up in corporate numbers, especially from Q3 onwards, stability should return.
Are we going to end 2025 with single-digit returns?
This year is shaping up to be more of a consolidation year. Markets are essentially moving in line with earnings growth.
Single-digit returns for the benchmark index look likely. But that doesn’t mean there’s no opportunity.
If tariff talks resolve positively and policy measures begin translating into demand and earnings, the market has enough fuel to retest highs in the second half. Large caps, in particular, offer both valuation comfort and resilience at these levels.
Trump’s tariffs are key risks. Do you see any internal risks?
Externally, tariffs clearly create an overhang for export-driven sectors, and we’ll need to watch how negotiations evolve.
Internally, the risk isn’t about the intent of policy — it’s about the pace of transmission.
Rate cuts, fiscal relief, and capital spending are all in place, but if they don’t show up in corporate earnings quickly, sentiment could stay cautious.
On the positive side, rural demand is showing early signs of recovery, and if that holds alongside government spending, domestic risks should be well contained.
After income tax relief, the government wants to rationalise GST. How do you see these measures impacting the economy?
The government is clearly trying to pivot from an investment-heavy model to one that also leans on consumption.
Tax reliefs for the middle class and rural households put more money in people’s hands, and GST rationalisation can reduce friction and boost disposable incomes further.
This is timely because consumption growth has been lagging in recent years. A pickup in household demand can set off a virtuous cycle — it drives volumes, which in turn encourages private capital spending, reinforcing growth momentum.
Which sectors should one buy now? Do you see value in IT?
Our preference continues to be for quality, domestic-facing sectors with earnings visibility.
BFSI, telecom, healthcare, and consumption remain strong structural plays, and even capital spending-linked businesses are attractive after the recent correction.
Export-oriented sectors face more uncertainty, so we’re a bit cautious there.
On IT, the correction has created tactical opportunities — but the real, sustained recovery will depend on global tech budgets, which still look a couple of quarters away.
What should be the equity investment strategy now? Should we add mid and small-caps?
At this stage, balance is key. Large caps provide the anchor — they’re relatively stable, liquid, and supported by steady institutional flows.
But the broader market has corrected meaningfully, and in high-quality mid and small caps, risk-reward is starting to turn favourable.
Over the next 12 months, I’d expect broader markets to deliver better returns as earnings catch up, though it will be a more gradual recovery.
Today, a barbell approach — core in large caps with selective mid- and small-cap exposure — makes the most sense.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
