Nomura sees 4% upside in Nifty50 target by Dec 2025; bets on these stocks

Nifty share price target: Nomura sees Nifty50 reaching 23,784 by December 2025, implying an upside of just 3.7 per cent in the rest of the calendar year

Nomura Nifty Target: Despite a 16 per cent correction in Nifty50 index (in US dollar terms) from its record high levels, global brokerage Nomura sees muted returns from the 50-share India benchmark index in 2025.

 

From the current Nifty level of 22,932.9 (Wednesday’s closing level on the NSE), Nomura sees Nifty50 reaching 23,784 by December 2025, implying an upside of just 3.7 per cent in the rest of the calendar year.

 

"The price-to-earnings (P/E) valuation multiple for Nifty50 have moved lower to 19.0x one-year-forward earnings from the September 2024 peak of 21.3x. However, our December 2025 Nifty50 target is 23,784, which is based on even lower P/E multiple of 18.5x Dec 2026F Nifty EPS of Rs 1,286," it said in its latest report.

 

 

In its bear case, Nomura projects Nifty at 21,800 by the end of December 2025, while in a bull case, Nifty may touch 25,700. These Nifty 2025 targets are based on 17.0x/20.0x Dec 2026F earnings.

 

As a strategy, Nomura suggests investors cherry pick inexpensive stocks.

 

Nomura Top Stocks Picks for 2025

Among sectors, Nomura is ‘Overweight’ on Financials, Consumer staples/FMCG, Oil and gas, Telecom, Power, Pharma, Internet, and Real estate.

 

The brokerage is ‘Underweight’ on Consumer discretionary, Autos, Capital goods, Cement, Hospitals, and Metals.

 

Among top stock picks for 2025, Nomura has added Axis Bank in its 'Preferred Stocks' portfolio, and removed Hyundai Motor India, Nippon India AMC, and GE Vernova T&D.

 

Further, in its 'Least Preferred Stocks' portfolio, Nomura has added Voltas and ABB India, and removed Maruti Suzuki India, and Havells.

 

Nomura on India Inc Earnings Outlook

Nomura said India stock market saw a ‘strong’ rally over the past few years, which set high expectations for earnings.

 

However, the slowdown in the corporate earnings over the past two quarters (Q2FY25 and Q3FY25) contributed to the double digit fall in the Nifty index, 21 per cent in the Nifty MidCap index, and 23 per cent in the Nifty SmallCap index from their peaks.

 

Going ahead, while Nomura sees a cyclical recovery in economic growth from the lows of Q2FY25 on the back of a pick-up in government expenditure growth and accommodative central bank policy, it sees upside risks to corporate earnings-to-GDP ratio in the near term. This, it said, could limit a material earnings growth outperformance to economic growth in the near-term.

 

Nomura pointed out that a potential dip in the net investment-to-GDP ratio after the recovery over FY21-24 amid weak government capex growth and global trade policy uncertainties; the rise in household savings; the government’s commitment to fiscal consolidation, which could limit fiscal stimulus; a decline in the dividend-to-GDP ratio due to slower earnings growth in FY25F are potential headwinds to the earnings-to-GDP ratio improvement.

 

"Since January 2025, Nifty50 consensus earnings estimates for Dec 2026E have been revised lower by roughly 3.5 per cent. We had expected potential consensus earnings cuts of 3-6 per cent for FY26-27F. We think an additional low- to mid-single-digit percentage earnings cut remains a possibility," it said in its report.

 

Q3 Results Review

The 228 companies under Nomura’s sample universe reported an aggregate net profit growth of 16 per cent year-on-year, driven by Bharti Airtel and SBI.

 

Adjusted for the one-off gains in these two companies, Nomura said the aggregate profit growth was 11 per cent Y-o-Y.

 

Of the 174 companies for which consensus (Bloomberg) estimates were available, nearly 57 per cent (100 companies) missed consensus estimates.

 

"Consensus estimates suggest earnings cuts of 2 per cent/3 per cent/3 per cent for FY25/26/27E. Earnings have been revised lower for more than 70 per cent of the companies. Currently, consensus estimates suggest earnings growth of 8.6 per cent/16.1 per cent/13.8 per cent for FY25E/26E/27E. Thus, over FY24-27E, for the BSE 200+ universe, consensus expectation is for an earnings CAGR of 12.7 per cent," Nomura said.