2025 Market Outlook: B&K lists key themes for medium and long term, top stock bets include L&T, SBI, and more | Stock Market News

2025 Market Outlook: Brokerage house B&K has outlined its market outlook for 2025, highlighting the challenges and opportunities as investors navigate through a period marked by macroeconomic uncertainty and a shifting global landscape. 

The brokerage noted that the second half of 2024 was particularly challenging, and the earlier part of 2025 may not offer significant respite. It stated that market returns are likely to align closely with earnings growth, reflecting its cautious stance.

Thematic and Bottom-Up Stock Picking

B&K highlighted its reliance on a blend of thematic investing and bottom-up stock selection to construct its model portfolio. The brokerage believes this dual approach is essential to navigate uncertain markets. While mid-cap and small-cap valuations appear elevated, sufficient opportunities exist across market capitalisations for diligent investors, B&K asserted.

B&K stated that growth disappointed in the first half of the current fiscal year, but expressed hope that demand could revive in the fourth quarter, spurred by a strong marriage season, a robust Rabi crop, and increased government spending in the second half of the year, particularly given a lighter election calendar. 

However, for growth to become a significant market driver, clear evidence of an economic upturn is required, alongside an improvement in the macro environment, it added.

The brokerage believes that the Nifty appears fairly valued, with a 13 per cent upside likely over the next 12 months based on its earnings growth projection of 13 per cent and a 6.8 per cent exit yield assumption.

Near to Medium-Term Themes

B&K identified key themes and corresponding stocks that are expected to drive earnings and news flow in the near to medium term:

Government Capex Revival: L&T, Bharat Electronics, PFC, KSB, and Titagarh Rail Systems

Resilient Consumer Demand: Radico Khaitan, Varun Beverages, Trent, Shoppers Stop, Safari, CG Consumer, and Voltas.

Real Estate Cycle Continuation: Aditya Birla Real Estate, Polycab, and The Supreme Industries

Regulatory Changes in Auto: Subros and ZF Commercial VCS

Trump Trade Beneficiaries: Infosys, TCS, and Welspun Corp

Long-Term Themes

For long-term investments, B&K focused on structural themes including:

Contract Manufacturing: Divi’s Lab, Dr. Reddy’s Lab, Suven Pharma, Neuland Laboratories, and PI Industries

Auto Diversification: Samvardhana Motherson International and Bharat Forge

Financialization: SBI, ICICI Bank, Bajaj Finserv, CAMS, KFin Technologies, and Prudent Corp. Advisory

Formalization: Info Edge (India) and TeamLease Services

Sustainability: Praj Industries, Balrampur Chini, NTPC, Tata Power, CESC, and GAIL

Advanced Materials: Graphite India, PCBL, and Carborundum

Cement Consolidation: UltraTech Cement and The Ramco Cements

Digitalization: Affle India

Bottom-Up Stock Picks

In addition to thematic investments, B&K shared a list of bottom-up stock ideas for 2025, which includes City Union Bank, Shriram Finance, Colgate, ITC, Usha Martin, Schaeffler India, Mahindra & Mahindra, Sun Pharma, and Bharti Airtel. Take a look:

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 decisions.