PERFORMANCE REPORT – Q1 2025

Similar to the last quarter ending December 2024, the Indian stock markets experienced significant volatility, influenced by global economic uncertainties, foreign capital movements, and sector-specific developments.

Nifty exhibited a downward trend during this period. On Jan 1, Nifty opened at 23,637.65. By Mar 31, it had declined to 22,397.2, reflecting a decrease of approximately 5.25% over the quarter. This decline was attributed to factors such as record FII outflows and subdued corporate earnings, leading to a correction in the market.

India VIX showed significant fluctuations during this quarter. In February, the VIX reached a high of 15.9025, indicating increased market volatility. By Mar 19, it had declined to 13.2975, suggesting a reduction in market uncertainty.

Certain sectoral indices stood out during this period. The financial sector, particularly the Nifty Financial Services Index, showed resilience. In Mar 2025, FPIs significantly increased their investments in India’s financial sector, injecting ₹175.85 billion ($2.06 billion), or two-thirds of the total $3.05 billion inflows during the period. This marked the largest biweekly influx in 15 months and drove a 9% gain in the Nifty Financial Services Index—its best monthly performance since July 2022. Conversely, sectors such as IT, Auto, and Banking faced declines by Feb 2025, reflecting investor concerns and high market volatility.

The overall market sentiment during this quarter was cautious. It is projected that Indian equities would remain relatively flat over the subsequent three months due to factors like high valuations and the weakest earnings season in four years. A back-loaded recovery is expected, with Nifty potentially reaching 24,000 by mid-2025, contingent on earnings growth and improved investor confidence.