2024 was like riding a rollercoaster: smooth sailing in the first half, then a sudden drop in the second. The year kicked off with solid returns, but by the second half, the major indices barely budged. Large-cap indices gave moderate returns, while mid- and small-caps had a much more exciting ride with solid gains.
Healthcare and realty stole the show, while banks and consumer staples fumbled. Automobiles were cruising ahead in H1, but then hit a speed bump, losing much of their momentum in H2. IT stocks had a similar plot twist: a slow start, but a strong comeback in the second half. But, let’s not sugarcoat it—when you factor in inflation and the depreciation of the rupee, the overall returns were rather "meh."
Looking ahead to 2025, it might feel like deja vu from the latter half of 2024. The market will likely wander aimlessly until there's more clarity on some big issues. And guess what? We have got a list of challenges: expensive valuations, rising earnings expectations that might not live up to the hype, and sluggish consumption demand.
Throw in the uncertainty of the new US administration’s policies and rising geopolitical tensions, and you have got a recipe for a bumpy ride ahead. The behavior of domestic investors will be especially intriguing—will they stay in the market or hit the brakes when things get rocky? And with the 2026 budget on the horizon, it’s like waiting for a big reveal that could set the tone for the next chapter.
Mahindra & Mahindra (Rs 3,082, +2.5%)
Stock rose after company posted high teens growth in December.
Bull Case: Nuvama expects PV growth to be in double digits, driven by M&M. Positive customer sentiment and a favourable base should aid tractor sales, further aiding growth.
Bear Case: While pricing of XEV 9E is aggressive, YES Securities believe there can be cannibalisation to company’s existing product portfolio. The BE 6e is designed to rival Tata Curvv, MG ZS, and MG Windsor while XEV 9e to rival yet to be launched Tata Harrier EV and Sierra EV.
One 97 Communications (Rs 986, -3%)
NPCI extends deadline to implement transaction volume cap on UPI volumes
Bull case: Paytm could benefit from the extended UPI transaction volume cap deadline, giving it more time to scale and adapt its offerings. With its strong brand recognition, expanding ecosystem, and growing customer base, Paytm remains a significant player in India's digital payments space.
Bear case: The extended deadline for the UPI volume cap may benefit the market leaders, PhonePe and Google Pay, further solidifying their dominance in the payments space. Paytm could struggle to keep up, facing slower growth and increasing pressure on its market share.
(with input from Vaibhavi)
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