Media and PSU bank shares decline significantly in FY25

In the fiscal year 2025, several sectors, including media, energy, and public sector banks, are predicted to perform poorly, while sectors like defence and financial services are expected to do well. The media sector has seen a sharp decline in profits, while public sector banks, despite reporting strong figures, are facing challenges such as non-performing assets (NPAs). The Nifty Media index has dropped by 20% this financial year. Other sectors like Nifty Energy, Nifty PSU Bank, and Nifty Realty have fallen by 19%, 18%, and 12%, respectively. In contrast, defence, financial services, and healthcare sectors have experienced significant gains of 22%, 12%, and 10%. Stocks in metals and private banks are also viewed positively for the upcoming year. Despite some sectors seeing gains, the overall market sentiment has been weak. For instance, the media sector reported an 8% decline in profit after tax, while the oil and gas sector faced a 33% drop in earnings. Public sector banks had a 23% rise in profit yet saw their stocks decline compared to private banks. The weakness in PSU bank stocks is attributed to growing concerns about NPAs and competition from private banks. Investors are currently more optimistic about large-cap private banks, especially State Bank of India. Meanwhile, infrastructure and PSU stocks have suffered after a strong performance in previous years. Despite a 30% decrease over the past six months, the Nifty India Defence index has been one of the best performers due to government support for the sector. The financial services sector has remained resilient, with only a minor decline, while healthcare has witnessed substantial earnings improvements. Going forward, experts suggest looking into sectors like metals, non-banking financial companies, and private banks to capitalize on potential growth. With private banks trading at lower valuations, they may present good investment opportunities.