Jefferies predicts Nifty to reach 26,600 by end of 2025, reveals top stock picks

Jefferies has forecasted that the Nifty 50 index will achieve a moderate 10% return, with a target of 26,600 by the end of 2025. The brokerage attributes the cautious market outlook to factors such as slowing earnings growth, a consumption slowdown, and profit booking after previous gains. However, it expects the index’s one-year forward price-to-earnings multiple to remain above its five-year average, aligning with projected earnings growth.

While the overall market outlook remains conservative, Jefferies has favored large-cap stocks over mid and small-cap options. The sectors it is overweight on include financials, IT, telecom, automobiles, healthcare, utilities, power, and real estate, while it is underweight on energy, consumer staples, consumer discretionary, and materials. The industrials sector has been given a neutral rating.

Jefferies has identified several large-cap stocks with significant upside potential, projecting gains of 17-43% in companies like ICICI Bank, Axis Bank, SBI, Bharti Airtel, JSW Energy, TVS Motor, Coal India, Godrej Properties, and Sun Pharma.

The brokerage views India's economic slowdown as shallow, expecting it to end by mid-2025, supported by government spending, improved liquidity, and a low base effect. This is expected to boost GDP growth and corporate earnings.

In addition, Jefferies anticipates continued capital raising activity, with companies likely to raise funds through IPOs in 2025, unless a significant market correction occurs.