Bernstein recommends selectively buying Indian equities for 2025, anticipating potential recovery

From Investing.com: 2025-01-02 14:11:25

Bernstein advises selectively buying Indian equities for 2025, targeting a 12% return with the Nifty 50 reaching 26,500 by year-end. Despite macroeconomic challenges and earnings misses, signs of industrial recovery suggest the worst may be over.

Indian markets faced headwinds in 2024, with a 9.8% drop in equities and a 2.4% rupee depreciation in Q4. Weak GDP numbers, earnings misses, and hawkish Fed commentary contributed to the decline, but Bernstein sees a potential recovery ahead.

Government capex could see a revival in 2025, supported by upcoming budget focus on growth, easing base effects, and declining interest rates. While uncertainties persist, opportunities in the China+1 strategy and IT spending could serve as positives for Indian equities.

Bernstein acknowledges risks to FY26 earnings but sees limited downside for the Nifty, with a worst-case scenario of 22,000. It suggests caution on small- and mid-cap stocks, recommending focus on large-cap names aligned with structural growth themes for potential returns.

Invest ahead of the anticipated recovery, says Bernstein, as India remains in an early-cycle phase, poised for growth in the coming quarters. With a lowered target price-to-earnings multiple, the brokerage remains cautiously optimistic about the Indian equities market in 2025.



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