Nifty 50 projected to reach 26,100 by 2025-end, says Kotak Securities; prefers Banks, IT, Realty, Pharma, Healthcare | Stock Market News

The Indian stock market benchmark index Nifty 50 is expected to reach 26,100 level by December 2025, Kotak Securities said in its Market Outlook 2025 report, while maintaining a ‘cautiously optimistic’ approach on the domestic equities.

The Nifty 50 target for 2025 represents a 6% increase from its closing level on Tuesday.

Kotak Securities said the domestic fundamentals will remain robust but cautious optimism is warranted. It suggests long-term investors should focus on quality assets amid rich valuations.

Global economies are showing signs of stabilization as monetary policies transition towards easing, with anticipated interest rate cuts in the United States, Europe, and Asia. Domestically, inflation remains elevated, particularly in food prices. Despite inflation persisting above target levels, a sharp decline in GDP could heighten the likelihood of an interest rate cut in the February policy meeting, according to a brokerage report.

“India maintains its position as one of the world’s fastest-growing major economies, making it a compelling investment destination for global investors. While we remain confident in India’s long-term growth potential, we advise investors to approach the market with a degree of cautious optimism. We foresee the equity market to gain more momentum and commodities crossing its historic best in 2025,” said Shripal Shah, MD & CEO, Kotak Securities.

Nifty Target

The brokerage firm estimates Nifty’s FY25E earnings growth at 4.9%, followed by 16.3% in FY26 and 14% in FY27.

In its base case, it projects Nifty 50 to reach 26,100 by December 2025, assuming a 19x P/E on FY27 EPS (earnings per share) of ₹1,372.

In the bull case scenario, Kotak Securities has a Nifty 50 target of 28,800 (21x P/E) and its bear case Nifty target is 23,300 (17x P/E), assuming a downside of more than 5% from Tuesday’s closing level.

FY25 will likely see more broad-based growth across sectors. However, the oil marketing companies (OMCs) will likely drag down overall profits, as the brokerage firm expects their profits to normalise in FY25. It advises to invest in select sectors and stocks at current valuations and keep adding on dips.

Kotak Securities prefers sectors such as Banks, IT, Realty Pharma and Healthcare.

Rupee Outlook

The year 2025 is expected to bring heightened volatility in the currency market as the Trump administration’s trade policies and fiscal reforms disrupt global markets, potentially driving the Dollar higher. The Federal Reserve’s monetary stance will play a critical role in shaping the currency’s trajectory.

The brokerage expects USD/INR to trade towards the 86.00 / 87.00 levels before the 2025 year-end.

Gold Price Outlook

Gold prices are expected to benefit from safe haven bids stemming from escalating Russia-Ukraine conflict, though pace of further gains may be determined by incoming US data and Trump’s trade policy. Silver’s industrial applications and supply-demand dynamics is likely to position it as a critical commodity for the green economy.

As the world continues its transition toward renewable energy and technological modernisation, silver is poised to shine even brighter in the years to come, Kotak Securities said.

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 making any investment decisions.