As the 2024 trading year concludes, benchmark indices Sensex and Nifty are set to finish with single-digit returns. So far, Sensex has gained 8.92%, while Nifty has risen by 9.49%. The year saw significant milestones, with Sensex reaching an all-time high of 85,978 and Nifty hitting a record 26,277 on September 27.
Outlook For 2025
Looking ahead to 2025, an average of brokerage targets suggests the market is poised for a strong double-digit return of over 16%, despite ongoing concerns about FII selling, weak earnings, high valuations, and geopolitical issues.
Pankaj Pandey, Research Head at ICICIDirect, is optimistic about the market. He stated, “We are constructive on markets and believe the recent correction provides a good entry point for long-term wealth generation. With a modest ~7% growth expected in Nifty earnings for FY25E (on a high base), we anticipate Nifty to return to double-digit earnings growth, with earnings over FY25-27E projected to grow at a CAGR of 15%.” He noted that key growth drivers would include a pick-up in domestic GDP growth, falling interest rates, and a continued supportive policy environment.
Saurabh Jain, Managing Director & Head of Wealth Solutions at Standard Chartered Bank, India, shared a similar outlook: “As we head into 2025, our base case is a recovery in India’s growth and corporate earnings, supported by increased government spending and a rebound in consumption demand as the RBI begins its policy easing cycle. We believe the macro environment favors risk assets and have raised equities to Overweight in our Foundation allocations, funded by an Underweight in cash. While elevated valuations may limit multiple expansion, earnings growth is expected to drive returns, supporting outperformance in equities relative to cash and bonds. Domestic equities benefit from strong profitability measures like return on equity (ROE), which remains ahead of global peers. Additionally, foreign investor participation in domestic equities remains at a decade-low. Gold continues to be a vital core holding and a hedge against rising geopolitical tensions, inflation, and growth slowdowns.”
Shiv Chanani, Senior Fund Manager – Equity at Baroda BNP Paribas Mutual Fund, emphasized a bottom-up approach for 2025, stating, “After two strong years of market returns, a more selective, bottom-up strategy is likely to be effective. Investors should remain agile in their asset allocation, being mindful of market volatility. Portfolios should include liquidity margins and focus on assets with strong earnings sustainability.”
Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares and Stock Brokers, advised investors to design their portfolios with a balanced risk-to-reward ratio, diversifying across quality large-cap, mid-cap, and small-cap stocks. He recommended rebalancing or adding funds during market dips or opportunities.
Jathin Kaithavalappil, Assistant Vice President at Choice Broking, suggested focusing on high-quality stocks with strong fundamentals, particularly in banking, consumer, and technology sectors. He also recommended selectively adding stocks from defense, pharmaceuticals, and railways, ensuring portfolio balance between growth and defensive sectors.
Will Sensex Cross 90,000 By December 2025?
As 2025 comes to a close, Sensex is expected to end the year with a gain of around 8%. However, global brokerage firms have set more optimistic targets, with one predicting a target of 90,520, while Morgan Stanley has set an even higher target of 93,000.
Morgan Stanley highlights India’s strong earnings, macroeconomic stability, and robust domestic flows as key drivers for this bullish outlook. The firm also believes Dalal Street will be one of the top-performing emerging markets in 2025. “In our base case, we anticipate continued macro stability in India, driven by fiscal consolidation, increased private investment, and a positive gap between real growth and real rates. We also expect strong domestic growth, no recession in the US, and stable oil prices,” the firm noted.
Nifty Target For 2025
Several brokerages have issued their Nifty targets for 2025. Citi forecasts a target of 25,000, Goldman Sachs has set a target of 27,000, BofA predicts 26,500, and Jefferies is aiming for 26,600.
Mahesh Nandurkar from Jefferies commented, “After strong EPS growth and market returns over the last four years, expectations for growth are moderating. EPS growth has slowed to below 10% in FY25, but we expect a 13% growth in FY26/CY25. Domestic flows remain strong, but an increase in equity supply is limiting market returns. Our December 2025 Nifty target of 26,600 suggests a 10% total return.”
Bajaj Broking, using a comprehensive analysis including a bottom-up approach, market seasonality, DII flow, and conventional charting methods, predicts that bulls will dominate the market in 2025, with Nifty potentially reaching 28,700 over the next 12 months.
Stocks To Buy In 2025
For 2025, Motilal Oswal is ‘overweight’ on sectors such as IT, healthcare, BFSI, consumer discretionary, industrials, real estate, and themes like capital markets, EMS, digital e-commerce, and hotels. Their top 10 stock picks reflect these sectors, with high growth potential and strong upside. These stocks are expected to deliver solid returns, making them prime investment opportunities for the year ahead.
Motilal Oswal’s top stock picks for 2025 include: ICICI Bank, HCL Tech, L&T, Zomato, Polycab, Godrej Properties, Nippon Life AMC, IPCA Labs, Lemon Tree Hotels, and PN Gadgil.
Jefferies has selected ICICI Bank, Axis Bank, SBI, Bharti Airtel, JSW Energy, TVS, Coal India, Godrej Properties, and Sun Pharma as their top picks.
In the mid and small-cap space, Prabhudas Lilladher has identified Aster DM Healthcare, Crompton Greaves Consumer, Cyient, DOMS Industries, Jindal Stainless, Lemon Tree Hotels, Safari Industries, and Triveni Turbine as key stocks to watch.
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