Kotak Securities has forecast the Nifty50 to reach 26,100 by the end of December 2025 as a base case scenario, the Indian rupee to touch ₹86/87 to the US dollar, continued strengthening in gold prices and oil prices to face pressure with US boosting production.
In its annual outlook for the new year, the brokerage firm said that while cautious optimism would prevail in the domestic equity markets with some sectors shining through, precious metals such as gold and silver would shine while crude oil could struggle.
A major factor that would have an effect on all markets would be the new administration in the US under Donald Trump and policies that would be followed.
After a weak earnings growth in Q2 of FY25 and continued pressure in consumer demand, Kotak Securities projected Nifty’s FY25 earnings growth at 4.9 per cent, FY26 growth at 16.3 per cent and FY27 growth at 14 per cent. In FY24 earnings growth was at 20.3 per cent.
Equities
Domestic fundamentals are seen robust but cautious optimism is warranted, Kotak Securities MD &CEO Shripal Shah said. “While we remain confident in India’s long term growth potential, we advise investors to approach the markets with a degree of cautious optimism.”
In a bull case scenario, the broker firm expects Nifty50 to reach 28,800 next year end with a downside scenario of 23,300.
It’s preferred sectors are BFSI, IT, Realty, Pharma and Healthcare.
With reference to corporate performance in the current fiscal year it said that FY25 was likely to see more broad based growth across sectors but oil marketing companies were likely to drag down overall profits.
Rupee
The currency environment has been choppy in the later half of 2024 with the US dollar strengthening and the rupee weakening. Kotak Securities said there could be significant disruptions in global trade with Trump signaling radical reforms.
There could be a sharp rise in the currency volatility. It pointed out that negative real interest rate differential between the rupee and dollar compounded the risk.
Gold
In October gold surpassed $2,800 an ounce and Kotak expects this to go to $3,100 next year. This could be due to the effect of de-dollarisation and waning influence of the US dollar as a benchmark and reserve currency.
It said that demand from Asian markets, particularly China and India, will likely support prices. It may, however, also face headwinds from Trump’s policies of tariffs and tax cuts.
