Listen to this article
Emkay Institutional Equities which is a part of Emkay Global Financial Services Limited, conducted a virtual media webinar on the outlook for the Indian equity markets. Emkay projects Nifty to be at levels of 25,000 by December 2025, and FPI selling to subside by the second quarter of 2025.
The webinar highlighted near-term weakness and heightened volatility for Indian equities in Jan-March 2025. The company expects a gradual consumption recovery in April-June quarter 2025. The recovery will be led by an improvement in employment trends, a revival in unsecured lending and an uptick in welfare spending.
Key sectors
Emkay maintains an overweight stance on discretionary, real estate, and healthcare, while remaining neutral on industrials, IT and energy
Financials, staples and materials are designated as underweight due to structural concerns and valuation pressures
Due to a rebound in IT hiring, better liquidity conditions and an improvement in retail lending dynamics, the research group anticipates discretionary consumption recovery within 2-3 quarters
Other key highlights
- The top investment ideas of Emkay include Lupin, Zomato, Tata Motors, IndusInd Bank in large caps. Escorts, Paytm, Metropolis in midcaps, and Stovekraft, and Quess Corp in the small cap segment
- The company said that despite persistent selling pressures, FPI activity is likely to stabilize post Jan-March 2025
- The earnings downgrade cycle appears to be concluding, with consensus Nifty estimates for FY26 already adjusting downward by 3.9% since January 2025
- The firm further said that it remains constructive on mid-teens earnings growth for FY26, driven by Financials, Metals, and Energy
Nirav Sheth, CEO - Institutional Equities, Emkay Global Financial Services stated: “Markets tend to over-react and overextend on both, the upside and the downside. The bottoming process is usually volatile which we are currently witnessing. Our macros are solid, given the low and stable CAD, fiscal deficit under control, and a more accommodative monetary policy now. We estimate that the worst of the earnings downgrade cycle is behind us and expect a recovery in the second half of the fiscal – triggered by renewed government spending and tax relief led consumption spend. It is time to buy.”
Seshadri Sen, Head of Research and Strategist – Institutional Equities, Emkay Global Financial Services added “Despite short-term headwinds, the structural investment case for India remains intact. The shift in sectoral dynamics presents opportunities, particularly in Discretionary, Real Estate, and Healthcare, where we see strong growth potential.”
