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With an expected earnings growth of 15 per cent, benchmark index Nifty 50 may hit 24,500 level by December 2024 and move further to surpass the level of 26,500 by December 2025, Emkay Investment Managers said on Tuesday.
The 50-share Nifty settled at 22,888.15 on Tuesday. In the previous day, it hit a new lifetime peak of 23,110.80.
In the immediate near term, markets are going to focus on Lok Sabha poll results, which are due on June 4.
An expected return of the NDA regime with a base case scenario of 330 seats will result in policy continuity along with major reforms on land, labour, and judiciary would support positive sentiment in the Indian markets, Emkay Investment Managers Ltd, the portfolio management services arm of Emkay Global Financial Services, mentioned in a webinar on the market outlook for FY25 and FY26.
Over the long term, geopolitical developments and elections in the US and UK will be watched out for along with the US Fed rate cuts in the third or fourth quarter of FY25, it added.
Emkay Investment Managers chief investment officer Manish Sonthalia advised investors to have a multi-cap approach with equal proposition in large-caps and mid-caps to take advantage of broad-based growth in Indian equity markets.
On the sectors, Sonthalia said Banking, Financial Services, and Insurance (BFSI), Public Sector Undertakings (PSUs), and industrials are expected to do well. BFSI has led the earnings growth and seen a correction in valuation.
Investment-related themes will come into play with power capex building up in the next 3-5 years.
"We are re-rating public sector units as some of the government entities will have an advantage in sectors such as defence, oil marketing companies and power financers.
"After being in a slump post-COVID, pharmaceuticals are expected to see a turnaround," he added.
According to him, consumption, manufacturing, green energy, digitisation & artificial intelligence and financialisation of savings will play key roles in the growth of the economy.