Nifty 50 likely to hit 27,000 by end of 2025, says Goldman Sachs

India immune to global issues, but earnings slowdown to weigh on equities, says Goldman Sachs

India will likely be insulated from possible global headwinds in the calendar year 2025 but the domestic factors — earnings growth slowdown and high valuations — will weigh on equity market performance, Goldman Sachs said in its India outlook for 2025.

 

The US brokerage sees the India market remaining range-bound over the next three months and has given a target of 27,000 for Nifty by the end of 2025.

 

"Domestically, while India's strong long-term structural growth story remains intact, growth has been cyclically slowing and impacting profits. Our economists expect India's GDP growth to decelerate to 6.3 per cent year-on-year, on continued fiscal drag and slower credit growth," it said in a report.

 

In addition, it highlighted possible near-term challenges arising out of regional market rotation (from India to China), the Securities and Exchange Board of India's measures to regulate index derivatives and large ongoing equity supply in the market.

 

For the global economy, the brokerage sees macro headwinds in stronger dollar, shallower emerging market easing cycles and likely higher US tariffs on China.

 

It expects the Reserve Bank of India cutting the interest rate by 50 bps next year on expectation of easing inflation.

 

Sectorally, Goldman Sachs is overweight on domestic sectors with higher earnings visibility like automobiles, telecom, insurance, realty and internet. "We upgrade exporters like information technology (IT) to overweight and pharmaceuticals to market weight on stable/improving demand, earnings per share (EPS) tailwinds from weaker rupee and defensive characteristics," it stated.