 "2025 market outlook and investment strategies for investors in India")
As we move into 2025, the investment landscape presents both opportunities and challenges. With strong domestic growth prospects and evolving global dynamics, investors need to stay informed about key trends and sectors. Varun Goel, sr. fund manager – Equity at Mirae Asset, shares his perspectives on the Indian market's outlook for 2025 and his insights on investment strategies in an email interaction with Ayush Mishra.
Goel remains optimistic about India’s medium to long-term prospects, citing strong macroeconomic fundamentals, consistent earnings growth, and rising household incomes as key factors supporting the country’s positive growth trajectory.
“We are optimistic about sectors like banking & financial services, manufacturing, IT, pharmaceuticals, capital goods, and chemicals, while being cautious on global commodities due to potential volatility,” he noted.
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He emphasised the importance of monitoring global rate trends, oil prices, geopolitical developments, and the recovery of domestic consumption as major drivers to watch.
Where should investors invest?
For investors, Goel advocates maintaining a disciplined investment approach that aligns with financial goals and risk tolerance. He suggests a diversified portfolio that includes flexi-cap funds for broad market exposure.
“Smallcap funds can be considered by those willing to take on higher risk, with a calibrated exposure of 10-30 per cent, based on risk tolerance, and a minimum 4-5-year investment horizon,” Goel recommended.
He also highlighted the benefits of Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs) to manage market volatility. For more conservative investors, hybrid funds provide good diversification, while thematic sectors like consumption and banking & financial services offer potential for growth.
Why are you launching a small-cap fund now?
Goel elaborated on the rationale behind Mirae Asset’s new smallcap fund launch. He pointed out that smallcaps, having recently undergone consolidation, are now presenting attractive valuations, making this an ideal entry point for investors.
“Smallcap stocks offer significant alpha generation potential, and with India’s structural growth drivers— such as government reforms, rising consumption, and industrial expansion— these stocks are well-positioned for long-term growth,” Goel explained. He also mentioned the expected interest rate cuts in 2025, which could fuel growth from FY26 onwards, reinforcing the opportunity for smallcap investments in the coming year.
What are the big themes of 2025?
When discussing the big themes for 2025, Goel highlighted India’s strong economic fundamentals, including sound fiscal policies and robust corporate balance sheets. “While global markets may face volatility, India's growth trajectory remains strong,” he stated. He expects a revival in consumption, which could lead to increased discretionary spending, and remains positive about the manufacturing sector, buoyed by the Government’s push and the China+1 strategy. “We are also constructive on Banking & Financial Services, with reasonable valuations and higher return ratios,” he added.
How will global economic conditions influence the Indian market in 2025?
Goel believes that global economic factors will have mixed implications for India in 2025. The US Federal Reserve's rate decisions, potential delays in rate cuts, and policies from the new US administration will be key areas to watch. “While global liquidity may be impacted, India’s macroeconomic resilience and corporate health should help maintain growth momentum,” he noted. He also pointed to oil price volatility and geopolitical tensions as factors that could affect inflation, but remains confident that India’s fundamentals will provide stability.
How should investors plan to save tax in 2025?
When it comes to tax-saving strategies, Goel suggested a range of options, including the National Pension Scheme (NPS), Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), and tax-saving fixed deposits. He emphasised that the right choice depends on an individual’s needs and investment horizon, as each tax-saving option comes with its own lock-in period.
As we look ahead to 2025, Goel’s insights reflect a cautiously optimistic outlook for the Indian economy, driven by strong domestic growth and targeted government initiatives. Investors should focus on a diversified, long-term approach, with particular attention to smallcap stocks and thematic sectors, while remaining mindful of the potential global economic headwinds.