Motilal Oswal’s Forecast: Market Recovery Expected by 2025, Focusing on IT, BFSI, and Real Estate
2025 Market Predictions: Recoveries & Recommendations
The Indian stock market has seen an 11% correction in the past two months after hitting an all-time high, marking the third significant downturn since the COVID-19 pandemic. This dip, influenced by domestic and global factors like FIIs selling, has led to a shift in focus towards sectors like IT, healthcare, and BFSI, according to Motilal Oswal Wealth Management.
FIIs have sold over Rs 1.5 lakh crore in October and November, the biggest two-month selling spree in history. Factors like moderated earnings and high valuations in mid-caps and small caps have contributed to this shift. But the recent BJP victories in Maharashtra and Haryana have brought optimism back to the market, with investors expecting increased government spending and policy changes.
Recommendations from Motilal Oswal include maintaining an overweight position in large-cap stocks and selective allocation to mid and small-cap stocks. Their favored sectors for 2025 are IT, healthcare, BFSI, Consumer Discretionary, Industrials, Real Estate, and niche themes like Capital Markets and Digital E-commerce. They advise against metals, energy, and automobiles.
BFSI is seen as well-positioned to navigate uncertainties, with repo rate cuts expected to boost profitability. Retail participation is driving the Capital Markets sector positively. The technology sector is poised for recovery under President Trump’s new administration, benefiting India’s IT sector. Consumer Discretionary companies may thrive as consumer behavior shifts towards organized retail.
Top stocks recommended for 2025 by Motilal include ICICI Bank, HCL Tech, L&T, Zomato, NAM India, and more. The year may unfold in two phases, with market consolidation in the first half and a potential recovery in the second half. Factors like anticipated rate cuts by the RBI and changes in US trade policy will impact the market. Earnings are expected to grow at a 16% CAGR over FY25-27E.
While the market may face volatility in the near term, the long-term outlook remains positive, with opportunities to add bottom-up stock ideas. It’s always best to consult certified experts before making any investment decisions. Stay tuned for more updates on the market outlook in 2025.
