The Indian stock market is surprising resilient despite a turbulent start to this year, marked by geopolitical turmoil and weak earnings.
The Nifty and Sensex are recovering strongly over the last two months, with retail investors and institutions returning.
Raghvendra Nth, the Managing Director at Ladderup Wealth Management believes that Indian markets have entered a bullish zone.
According to the analyst, multiple economic factors such as private investment and favorable macroeconomic conditions have aligned with government spending in order to sustain growth.
Nath talks about a variety of topics, including the performance of the market in the first half, geopolitical risk, his expectations for earnings and the future. Excerpts edited:
Invezz: Markets have had a busy first half of the year 2025. What would you say about the market’s performance?
The calendar year began with a rather negative tone. Results for the third quarter were released, and unfortunately they weren’t very good.
The market reached a high in September 2024. After that, the valuations had been overstressed and the level of speculative activities was very high.
The market started to slip in September, but it corrected quite a bit during the first few months of the year — both January and February.
In April we also had the Indo-Pak conflict, but the results of the fourth quarter were no different than the third.
The Q4 results were not as good as Q3.
The first four months were spent dealing with the volatility. First, there was the correction in the markets, and then came the geopolitical risks.
Once the Indo-Pak war was resolved and the ceasefire announced, the markets began to move into a bullish phase. Retail investors began to enter the market.
The institutional investors of this time were late. Investors from abroad began to increase their exposure in India due to the country’s stability — both political and geopolitical.
Institutions in the country, who had cash on hand before and even during conflict, began to use that money.
The markets look pretty good as of today.
Contrary to all expectations, the first four months of this year were volatile. The last two are very positive.
Market is up 8-9% from the 31st of December, which is an excellent run.
Invezz Markets did not correct dramatically during recent geopolitical crises such as the Indo-Pak Conflict and Israel-Iran Tensions. What is the reason for this relative strength of markets?
The market prices risks as they arise, and not before.
This is what I’ve seen from the beginning of Trump’s Presidency.
The market began to behave more maturely when he announced all these trade restrictions and outrageous tariffs.
The market did react a bit after India destroyed these terror camps but it was not huge.
This shows how mature the market is. This also shows no one investor group has a strong influence on the market.
This reflects the presence of domestic and international investors as well as retail investors. It is more of a maturity sign than anything else.
Invezz: There’s been talk about a US-India deal, and it involves Trump. What do you think about the US’s trade policies, and how a possible deal could impact Indian businesses and sectors in light of them?
India enjoys a significant trade surplus with the US. IT exports, pharma and chemicals are the two major components.
IT exports can’t taxed because they are considered services. Pharma is important to the US. Costs of health care have consistently increased.
Many Americans rely on the government run hospitals. The fact that generics are supplied by Indian pharmaceutical companies keeps costs down.
Healthcare costs would increase dramatically if all generics are replaced by branded alternatives. Healthcare has therefore been excluded from tariff negotiations.
All the rest, such as gems, jewelry, and textiles, are fragmented, small sectors. Clothing is not a major export from India to America.
This is why the markets did not react negatively to those horrendous tariffs of 34-35%. When the deal is done, I believe it will be lower than 34%.
From that position of being egregious, the change in attitude is more formal. This will not have a major effect on either the economy or the markets.
What’s Your Expectation? As the results season for Q1 is about to start, what are your expectations in terms of sectoral and performance trends?
It is certain that Q1 will perform marginally better than the Q4. This is going to have a broad base.
No one expects a dramatic shift in the profitability of corporate profits anytime soon.
This dramatic shift already occurred in 2023-24, and 2024-25.
We do not expect any major changes now that we have a “normalized” scenario — there is no basis effect on which to alter percentages in either a positive or negative way.
There will be positive changes, which are fueled by multiple economic drivers. One of the biggest drivers is government spending.
Investment in the private sector is also a positive. Startups, PLI, inflation, interest rates and the startup world are all positive.
Balance sheet of the government is good; they spend a lot.
Capital from abroad continues to pour in. Banks and corporates have strong balance sheets, while capacity utilization is at 70%-90%.
Also, retail lending should also pick up. The drivers for corporate profitability have been established.
Invezz: How do you see the market in six months’ time or longer? Are there any targets that you are working towards?
Globally, I do not have any specific target prices, but things seem to be stabilizing. Even though the Middle East was a volatile area, it is now stabilizing.
Israel doing something different would be a surprise. It will certainly spook markets, but we’re heading towards a time of calm geopolitically, especially for India.
India’s economy is growing more independent. India is experiencing a low inflation rate, favourable interest rates, high retail growth, and strong income growth.
These factors all point towards a positive outlook for the stock markets.
The markets will easily reflect earnings growth. At the broad level, I do not see any price corrections.
The market will reward you with 8-10% if your earnings increase by 8-10%. We could receive more if earnings are higher.
Don’t surprise me if the valuations increase by 4-5%. If earnings increase by 10%, then the market could give returns of 13-15%.
This trend will also continue in the coming year.
You can expect the Sensex to cross 1,000,000 if you look at the two-year outlook and assume that the market will rise by between 20-25%.
It would make a huge psychological impact, and it’s something I believe is possible in the coming two years.
The post Raghvendra Nth of Ladderup Asset Management says Indian markets are resilient amid global headwinds may be updated as new information becomes available
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