ABSL AMC’s 2025 outlook deck is one of the best from our industry, rich in data and insightful in nuances and dynamics that shaped 2024,dynamics currently at play and ones that will likely influence outlook for2025. It is a must read for every market participant. Copy-paste this link on anew browser window to view this deck: https://mutualfund.adityabirlacapital.com/-/media/BSL/Files/Documents/CY25_Annual_Outlook_ABSLAMC?utm_source=Websitehp&utm_medium=banner&utm_campaign=CY25-Annualoutlook
FIIs waning love affair with India is not just a 2024phenomenon – its now an 8 year old story and robust retail flows came in just in time in these years to keep markets in good cheer. Changing colour of money from FII to DII explains reversal of small/midcap valuation discounts to large caps into what is now a sizeable premium. If retail flows continue while FIIs maintain their exodus, can large caps actually stage their expected catch up rally – or will mid and small caps become a bigger bubble coming out of this correction? Harish discusses both possibilities before sharing his preferred expected outcome.
The 2025 outlook deck calls for 2025 to be a year of convergence in returns across asset classes. The deck goes beyond valuations to also demonstrate how market cap growth is running far ahead of profit pool growth. In this context, is it still reasonable to expect an 8%-12% equity return in 2025, or should one brace for either a deep correction or a prolonged sideways drift until profit pool growth catches up with market cap growth? Harish evaluates both possibilities and shares his preferred expected outcome.
The deck takes a look at the entire range of sectors and buckets them into 4 segments which gives readers a lot of clarity on the team’s thinking across markets. Harish is reversing his underweight position on private banks to overweight and shares the rationale for this change.
His 2 dark horse picks for 2025 are cement and metals – one domestic commodity and the other an international commodity. Does this mean commodities will rally in 2025? What impact might this have on commodity consuming businesses?
He names 5 sectors that have momentum – but which one needs to watch very carefully to decide possible exit strategies at opportune moments. These include capital goods, auto ancillaries, pharma, IT and consumer goods.
His guidance to distributors and advisors:
- Right now, it may seem that the bull market is over. It is not. We will come out of this correction.
- This is not the time to panic. This is in fact the time to assess risk appetite of your clients and add risk into their portfolios where appropriate.
- Your ability to assess, manage and add risk will be key to your success in 2025.