23,000 or 25,000? Here’s where experts see Indian benchmark Nifty 50 by FY25-end
With markets extending its bullish momentum in the new financial year FY 25. How much can the benchmark index Nifty 50 surge this financial year with the focus on upcoming elections as well as hopes of a rate cut in the latter half? Here's what analysts predict.
Extending the bullish momentum during Tuesday's trading, the Indian markets surged to unprecedented levels. Among the key benchmarks, the Nifty 50 index soared to a new high of 22,768, the BSE Sensex achieved a record-breaking level of 75,124, and the Bank Nifty ascended to a new peak of 48,940.
Meanwhile, analysts also noted that today's rally is broad-based, with the small-cap index nearing its all-time high and the mid-cap index reaching a new pinnacle at the 41,172 mark.
According to stock market experts, the recent uptick can be attributed to several factors. These include speculation surrounding a potential rate cut by the US Federal Reserve, abundant liquidity in the market, positive sentiments prevailing in global markets, robust performance in Q4 of 2024, and anticipation of a turnaround in the Chinese economy.
Fueled by India's strong economic prospects and a surge in retail investor participation, experts anticipate that the Indian stock market's unprecedented rally could continue. The increasing influence of retail investors acts as a buffer against potential downturns, even in the event of foreign capital outflows resulting from delayed or minimal rate adjustments by the Fed.
So how much can the benchmark index Nifty surge in this new financial year with the focus on upcoming elections as well as hopes of a rate cut in the latter half? Here's what analysts predict.
Sunil Damania, Chief Investment Officer, MojoPMS sees Nifty surging to 24,000-25,000 in FY25.
Reflecting on the past year, where Nifty 50 exceeded expectations with a remarkable 25 percent return, current valuations in India appear rich, with a trailing twelve-month Price-to-Earnings (P/E) ratio standing at 30x and market capitalisation to GDP ratio at 125 percent. Sustaining such valuations necessitates robust financial performance from India Inc. Market consensus anticipates Nifty 50 EPS growth at 16-17 percent annually over the next two years, suggesting returns could be in the single digits or low teens. Our projection places Nifty's closure between 24,000 and 25,200 by the end of FY 2025.
Neeraj Chadawar, Head - Fundamental and Quantitative Research, Axis Securities also forecasts an FY25 Nifty target of 25,000.
In our base case, we maintain our Dec’24 Nifty target at 23000 as we value it at 20x on Dec’25 earnings. In the bull case, we value NIFTY at 22x, translating into a Dec’24 target of 25,000. We present two themes for the market - Growth at a Reasonable Price’ and Quality, which look attractive at the current juncture.
Meanwhile, Varun Saboo, Head - Equities, Anand Rathi Shares and Stock Brokers projected a Nifty target of 24,800 for FY25.
Our target for Nifty 50 is 24800 by FY25E. We believe the sectors that would outperform are IT, Auto, FMCG, and Cement. Tactically we like the financials sector.
Another expert Pramod Amthe, Head Of Institutional Equity Research, InCred Capital sees a 5 percent upside in its base case scenario for the benchmark in FY25.
Nifty is currently trading at our target price. Looking at the big uncertainty of the year i.e. elections, we feel volatility will be high. Our short-term bull case is a 5 percent upside. Will peg our March 2025 nifty target post-elections. Metals, construction, infra, Agri, and diagnostic are still an underweight for us.
Rupak De, Senior Technical analyst, LKP Securities has the lowest FY25 target for Nifty among experts at 23,000.
The current sentiment seems robust, especially with the Nifty surpassing recent consolidation on the monthly time frame, indicating heightened optimism for the medium term. Looking forward, there's an expectation that both the Nifty and the overall market will continue on a positive path. On the higher side, the Nifty may potentially increase its gains toward 23,000 and beyond in 2024.
Among the sectors, one should refrain from choosing stocks from the small-cap sector, as in 2024, the focus might remain on large-cap stocks. Volatility surrounding elections in India and the US (towards the end of this year) might pose a high risk for most small-cap stocks.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.
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