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Corporate Growth Plateaus: Zerodha founder Nithin Kamath warns of slowing corporate growth across sectors.
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Valuation Concerns: Private market valuations, especially for startups, are excessive, with funding drying up.
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Earnings Growth Slows: Indian corporates’ profit growth declines, with some sectors struggling.
Zerodha founder Nithin Kamath has raised concerns about a slowdown in corporate growth, citing plateauing growth across sectors. Public and private markets are seeing valuations exceed fundamental values, with funding rounds drying up for later-stage ventures.
Data reveals declining profit growth, despite resilient revenue. Indian corporates’ profit growth slipped from 44% in June 2023 to -3.4% in September 2024. Analysts have tempered growth forecasts, with Motilal Oswal projecting 2% Nifty earnings growth for Q2 FY25.
Certain sectors, such as financials, healthcare, and public sector banks, are expected to defy the trend with earnings growth. However, metals, oil and gas, and cement sectors face challenges.
Corporate growth, in both the public and private markets, seems to be plateauing across most sectors.
Even in the private markets, in most cases, valuations in the earlier funding rounds were already far over the fundamental value or expected growth of startups, which is why… pic.twitter.com/xwJOG4TjQX— Nithin Kamath (@Nithin0dha) November 6, 2024
