Consolidated Outlook for 2025: The stock market has received positive returns for the ninth consecutive year this year. Mid cap and small cap have given much better returns as compared to large cap. Now the question is how the next year could be for the market and the economy. Talking about the consolidated outlook of brokerage firms for 2025, most of the brokerage firms believe that improvement in GDP growth is possible in 2025. Recovery is expected from the second half of FY 2025. Capex revival and improvement in rural demand are possible.
Expectation of reduction in inflation, possibility of capex revival also
Brokerage houses believe that inflation is expected to decline in 2025. Inflation is expected to decline to 4-4.2 percent. This year consumption and investment will get support. Capex revival is also possible in 2025. More spending is expected from the government and private sector. Also, strengthening of the investment process is possible. Brokerages expect an increase in exports. Exports are expected to increase by 19 percent in the next 5 years.
Private capex may increase
Brokerages believe that bank approval for private projects is increasing in the new year. These approvals are growing at a CAGR of 20 percent. There are indications of tremendous increase in further investment.
Stock market improvement possible
Brokerage houses believe that earnings growth and market recovery are expected in the second half of FY 2025. The market will see the impact of consolidation in the first half of FY 2025. Annual income growth is estimated at 16 percent between fiscal years 2025 and 2027. In the new year, support to the market is possible from BFSI, IT, industrial and consumer discretionary sectors. The brokerage believes that by the end of the calendar year, Nifty may see a level of 26,300 to 26,600.
How can the performance be on the basis of sector?
Profitability improvement in BFSI is possible due to strong credit metrics and rate cut. Recovery is possible with increased US tech spending in IT and policy support. Consumer discretionary is likely to benefit from rural demand and wedding season. Consumer discretionary is likely to benefit from organized retail growth. Industrials may get support from infrastructure and manufacturing capex. There has been a boom in realty for many years. Estimated 10 percent CAGR in volume growth. At the same time, stable growth is possible due to defensive demand in healthcare.
Brokerage houses say that BFSI, IT, healthcare, consumer discretionary, industrials and realty sectors may remain overweight in 2025. Whereas metals, energy, automobiles, midcap IT, consumer staples sectors may remain underweight.
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Sectors and Top Picks
The top picks of brokerage houses in the BFSI sector include ICICI Bank, SBI and HDFC Bank. In IT, brokerage houses like Infosys and HCL Tech. Whereas in Industrial, L&T and BHEL are among the top picks of brokerages. In realty, brokerage has a bullish view on Godrej Properties and Lemon Tree. Whereas in health care, it is advisable to bet on Sun Farm and Auro Pharma. Polycab and Zomato are the top picks of brokerage houses in consumer discretionary. Whereas in energy and commodities, brokerage houses are eyeing Tata Power and Coal India.
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