Axis Securities CEO: The Indian stock market has been through a rollercoaster ride in recent quarters — strong rallies, sudden pauses, and a mix of global and domestic challenges. But according to Pranav Haridasan, Managing Director (MD) and Chief Executive Officer (CEO) of Axis Securities, stability may soon be on the horizon.
Haridasan believes that from Q3 onwards, improved liquidity, lower inflation, and supportive government policies will help restore investor confidence. In an exclusive conversation with Mint, he shared his thoughts on market trends, risks, and investment strategies for the year ahead.
🌟 Key Takeaways from the Interview
- ✅ Stability likely to return to markets from Q3 2025.
- ✅ Single-digit returns expected for benchmark indices this year.
- ✅ Broader markets (mid- and small-caps) may outperform over the next 12 months.
- ✅ Government tax relief and GST rationalisation expected to boost consumption.
- ✅ Preferred sectors: BFSI, telecom, healthcare, consumption, and capital spending-linked businesses.
- ✅ Barbell strategy recommended: Large caps for stability + mid/small-caps for growth.
🕰️ When Will the Market Stabilise?
📊 Haridasan points out that the Indian market, after a strong run, is now taking a healthy pause. Earnings growth has been in line, but forward guidance has been muted. This has naturally led to a phase of consolidation.
👉 The silver lining? The macro backdrop remains strong:
- Liquidity has improved.
- Inflation is easing.
- The government has front-loaded support through tax relief and capital expenditure.
💡 “Once these measures start reflecting in corporate numbers, especially from Q3 onwards, we should see stability return,” says Haridasan.
📉 Will 2025 End with Single-Digit Returns?
This year is shaping up as a consolidation phase rather than a runaway rally. According to Haridasan, benchmark indices may end with single-digit returns, largely moving in sync with earnings growth.
However, that does not mean investors should sit on the sidelines. 🚀
- If global tariff disputes settle positively and domestic policy measures translate into stronger demand, the market could retest highs in the second half of the year.
- Large caps appear particularly attractive, offering both valuation comfort and resilience in uncertain times.
🌍 Key Risks to Watch
🔻 External Risks
One of the biggest external risks comes from tariff-related tensions, especially from the US. Export-driven sectors are directly impacted, and much depends on how these negotiations evolve.
🔻 Internal Risks
Internally, the challenge isn’t with policy intent, but with the pace of policy transmission.
- Rate cuts, fiscal relief, and capital expenditure are already in motion.
- But if these don’t reflect in corporate earnings quickly, investor sentiment could remain cautious.
On the brighter side 🌱, rural demand is showing early signs of revival, which — if sustained alongside government spending — could help offset internal risks.
💰 Government’s Role: Tax Relief and GST
The government has been shifting gears, moving from an investment-heavy model to one that also promotes consumption-driven growth.
✨ Recent measures include:
- Income tax relief for middle-class and rural households, putting more disposable income in people’s hands.
- GST rationalisation, which reduces friction and encourages spending.
Haridasan highlights that this is timely, as consumption growth has lagged in recent years. A pickup in household demand could trigger a virtuous cycle:
- Higher household demand →
- Boost in sales volumes →
- Increased private capital spending →
- Reinforced growth momentum.
📊 Sector Outlook: Where Should Investors Focus?
Haridasan believes in focusing on quality, domestic-facing sectors that offer strong earnings visibility.
🌟 Top Picks:
- BFSI (Banking, Financial Services, Insurance) → Supported by steady credit growth.
- Telecom → Riding on increased data consumption and digital adoption.
- Healthcare → A long-term structural story with rising demand.
- Consumption → Benefiting from tax relief and rural revival.
- Capital Spending-Linked Businesses → Attractive after recent corrections.
⚠️ Cautious Sectors: Export-oriented industries, given external uncertainties.
💻 What About IT?
The IT sector has corrected significantly, creating short-term tactical opportunities. But a sustained recovery depends on global tech budgets, which still look a few quarters away.
📌 Equity Strategy: Large Caps vs Mid & Small Caps
At this stage, Haridasan stresses the importance of balance.
🔹 Large Caps → Provide the anchor. They are liquid, relatively stable, and backed by strong institutional flows.
🔹 Mid & Small Caps → After meaningful corrections, high-quality names in this space offer attractive risk-reward opportunities.
📌 Recommended Strategy:
A barbell approach — keeping a core allocation in large caps for stability while selectively adding mid- and small-caps for growth potential.
📈 Over the next 12 months, Haridasan expects broader markets (mid & small caps) to outperform as earnings catch up.
🔮 The Road Ahead: Optimism with Caution
The outlook for Indian equities is one of measured optimism. While 2025 may not deliver blockbuster returns across the board, the right allocation strategy could still generate meaningful gains.
🌟 Key drivers to watch in the coming months:
- Transmission of government policies into corporate earnings.
- Resolution of global tariff issues.
- Continued recovery in rural demand.
- Pick-up in consumption growth.
📌 Final Thoughts
Pranav Haridasan’s insights remind investors that markets move in cycles. After periods of rapid growth, consolidation is both natural and healthy.
✅ While benchmark indices may only deliver single-digit returns this year, the broader markets hold promise for outperformance in the next 12 months.
✅ Government reforms, policy support, and easing inflation create a strong foundation for growth.
✅ Investors should stick to a disciplined, balanced approach — anchoring in large caps while selectively playing mid- and small-cap opportunities.
⚠️ Disclaimer: This article is for educational purposes only. The views expressed are those of the expert. Investors should consult certified financial advisors before making any investment decisions, as market conditions can change rapidly.
