Indian stock market: Market indices Nifty is expected to climb to 24,500 by December 2024, driven by an expected earnings growth of 15%. Furthermore, the Nifty is projected to continue its upward trajectory, surpassing 26,500 by December 2025, according to brokerage firm Emkay Investment Managers.
“In the immediate near term, markets will focus on election results. An expected return of the NDA regime with a base case scenario of 330 seats will result in policy continuity along with major reforms on land, labor, and judiciary will support positive sentiment in the Indian markets. Over the long term, geopolitical developments and elections in the US and UK will be watched out for with Fed rate cuts in 3rd or 4th quarter of FY25,” the brokerage firm said in a note.
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Furthermore, the brokerage firm advises the investors to adopt a multi-cap strategy, balancing investments equally between large-cap and mid-cap stocks, to capitalize on broad-based growth in the Indian equity markets. The majority of medium-term gains are anticipated to originate from the broader market segments.
“BFSI, PSUs, and industrials are expected to do well. BFSI has led the earnings growth and seen a correction in valuation. Investment-related themes will come into play with power capex building up in the next 3 to 5 years. We are re-rating public sector units as some of the government entities will have an advantage in sectors such as defence, oil marketing companies and power financers,” said Manish Sonthalia, Chief Investment Officer, Emkay Investment Managers Ltd.
He further added, “After being in a slump post-COVID, pharmaceuticals are expected to see a turnaround. We are witnessing K-shaped recovery in the premier end of consumer discretionary, with entry-level segment still not doing well.”
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The brokerage firm also suggested five themes to watch out in the near future –
Consumption: Per capita income moving up to USD 4500 by 2029 will translate into higher consumption of discretionary items.
Manufacturing: China+1 and Europe +1 likely to benefit speciality chemicals, pharmaceuticals, automobiles and electronic manufacturing services.
Green energy: Solar and wind expected to mainstream of energy transition in India. Value chain in power side is expected to benefit in a big way.
Digitization & AI: India will be at the forefront of innovation in technology.
Financialization of savings: Moving away from investments in fixed income to equity will benefit investment platform providers.
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Published: 28 May 2024, 06:37 PM IST
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