Market Outlook 2025: Insights from Jefferies

As we move into 2025, Jefferies projects moderate returns of 10% for the Nifty 50 index, expecting it to touch 26,600 by the end of the calendar year. Despite challenges such as slowing earnings growth, a consumption slowdown, and profit booking from elevated levels, there are several reasons for optimism. Let’s dive into the details.

Cautious Optimism: Jefferies’ Market Stance

The brokerage has taken a cautious stance on Indian equities, favoring large-cap stocks over mid-cap and small-cap names. This aligns with the belief that larger companies are better positioned to weather market volatility and economic challenges.

Sectoral Outlook for 2025

Jefferies provides a mixed outlook across sectors:

• Overweight: Financials, Information Technology, Telecom, Automobiles, Healthcare, Utilities & Power, Real Estate

• Underweight: Energy, Consumer Staples, Consumer Discretionary, Materials

• Neutral: Industrials

Top Large-Cap Bets for 2025

Jefferies has identified a list of top-performing large-cap stocks with significant upside potential:

• Financials: ICICI Bank, Axis Bank, SBI

• Telecom: Bharti Airtel

• Energy: JSW Energy, Coal India

• Automobiles: TVS Motor

• Healthcare: Sun Pharma

• Real Estate: Godrej Properties

These stocks are expected to deliver upside returns ranging from 17% to 43%.

Economic Outlook: Shallow Slowdown to End by Mid-2025

Jefferies views India’s economic slowdown as shallow and anticipates it will conclude by the first half of 2025. Key factors driving recovery include:

• Increased government spending

• Improved liquidity

• Low base effect

These drivers are expected to boost GDP growth and provide relief to corporate earnings, creating a favorable environment for equities.

IPO Market Momentum to Continue

The primary market remained robust in 2024, with companies raising nearly ₹1.5 lakh crore through IPOs. Jefferies expects this momentum to spill over into 2025, barring a significant market correction.

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