BNP Paribas, a big brokerage firm, believes that large companies, known as large-cap stocks, will do well in 2025. They have set a target of 25,500 points for the Nifty 50 index, which measures the performance of these large companies. Right now, the index is down by 12% from its highest point of 26,277 that it reached in September 2024. BNP Paribas says there is a chance for 10% growth in the Nifty index, which means it could go up by 8% this year.
The firm thinks that stocks of some big companies will perform well. For example, they expect Reliance Industries to reach a price of Rs 1,650, and Tata Consultancy Services (TCS) to hit Rs 4,750. Bharti Airtel is predicted to reach Rs 1,750.
However, BNP Paribas warns that overall market returns might be lower in 2025 because of challenges like high food prices, rising U.S. bond yields making the dollar stronger against the Indian rupee, and increasing costs of raw materials. Although money flowing into the Indian market is a good sign, the firm believes large valuation increases are unlikely, and market performance will just keep up with, or slightly lag behind, earnings growth.
They also mention that they prefer large companies, especially banks, because they expect strong earnings for these banks in FY26, with no big loan losses expected. They think banks look good at their current lower prices.
The report also mentions that the pharma sector is appearing costly compared to its expected growth, and they have a negative outlook on the metals sector due to low demand and prices for steel.
Indian stocks grew nicely between FY20-24, with good earnings growth, but things are slowing down now. Earnings expectations have been cut back over the last six months, and the early results from Q3FY25 have been mixed. While businesses made strong money in FY22-23 as the economy grew and commodity prices dropped, the average expectation for earnings growth of 14% from FY25-27 seems too hopeful unless the economy improves.
Looking at the global situation, BNP Paribas economists believe that President Donald Trump will keep many of his promises about foreign policies. This may lead to higher costs for imports from China and other countries, which could slow the U.S. economy and lead to tougher money policies from the Federal Reserve. This could put pressure on the Indian rupee, just as it did in late 2024, but India might weather this storm better because its economy is more focused inward.
In the banking sector, BNP Paribas has predicted target prices of Rs 2,550 for HDFC Bank, Rs 1,640 for ICICI Bank, and Rs 1,590 for Axis Bank. Bajaj Finance is set to reach Rs 10,000.
In consumer goods, Hindustan Unilever is expected to hit Rs 2,800, and Titan is forecasted to reach Rs 3,930. Maruti Suzuki’s target price stands at Rs 16,600, and Mahindra & Mahindra’s is predicted to be Rs 3,400. Other noteworthy companies include Infosys at Rs 2,225, Doms Industries at Rs 3,100, Havells at Rs 1,985, Larsen & Toubro at Rs 4,605, SBI Life Insurance at Rs 2,500, Aster DM Healthcare at Rs 735, and Metropolis Healthcare at Rs 2,515.
(Disclaimer: The views and opinions expressed here belong to the experts and do not represent the views of Thellv.news)
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