Outlook 2025: Less activity was seen in the Indian stock market on the last day of the year. The Sensex remained in the red for most of the session due to weak global cues. Nifty hit the day’s high of 23,689.85 before closing below the 23,650 level.
The Indian stock market has been volatile in 2024, a reflection of several geopolitical, political and economic events. Major indices like Sensex and Nifty 50 achieved important milestones in 2024. By the end of 2024, the market had experienced nine consecutive years of growth. In 2024, Nifty and Sensex will rise by 9% and 8% respectively. During the year, investors have been concerned about the high valuations of Indian markets compared to their worldwide counterparts, and September quarter corporate results fell short of market forecasts.
Looking ahead, the market direction will be significantly influenced by elements such as investor confidence, government policy, the Union Budget, third quarter earnings and the new US President and the potential impact on world trade. These will impact market movements during 2025
“We estimate a base target of 26,300 for Dec 2025, suggesting moderate returns of ~10% YoY supported by earnings improvement expected from Q3FY25. India’s real GDP growth to slow from 6.5% in FY20 Growth is estimated to be 7.0% in FY26, suggesting a stable domestic market and positive outlook Key challenges include uncertainty over trade war, softening of earnings growth and short to medium The period includes high premium valuations impacting stock performance,” Geojit said.
Multi-asset strategy: The recommended strategy includes maintaining a diversified multi-asset portfolio, allocating 60% in equities, 25% in debt, 10% in gold and 5% in cash to take advantage of new opportunities. Within the equity portion, the focus should be on large-cap stocks, given that mid-cap valuations have returned to their historical peak ratio of 60% relative to large caps.
Base Sense: We value Forward P/E at 19.5x and set a base target of 26,300.
Peak Case: We value Nifty50 at a Forward P/E of 20.5x to set a target of 27,650.
Trough Case: We value Nifty50 at a downside of 16x to set a target of 21,600.
