The Indian stock market is poised for another strong year in 2025. Analysts predict the market will be driven by corporate earnings recovery, increased government spending, private investments, and easing inflation. Axis Securities has highlighted 16 top stock picks for 2025 with potential upside ranging from 10% to 40%.
The list includes large-cap names like ICICI Bank and SBI, as well as mid-cap and small-cap stocks such as Varun Beverages and J Kumar Infra. ICICI Bank, a near-consensus “buy,” is expected to see a 17% upside. SBI, India’s largest lender, has a price target implying a 31% potential gain.
Varun Beverages and HDFC Bank are also among the top picks, with expected upside of 10% and 14%, respectively. Other notable stocks on the list include Bharti Airtel, Cholamandalam Investment, HCLTech, Aurobindo Pharma, Lupin, Dalmia Bharat, Prestige Estates, Chalet Hotels, Sansera Engineering, Healthcare Global, Gravita India, and J Kumar Infra. These stocks span various sectors and market capitalizations, offering diverse investment opportunities.
Top stocks with growth potential
Looking at the broader market, a study on Sensex returns over the past 46 years suggests that the index tends to deliver stronger returns in odd years. Sensex’s average gain in 23 odd years stands at 26.56%, compared to an average return of 11.20% in 23 even years.
Jathin Kaithavalappil from Choice Broking expects Sensex to touch 90,000 and Nifty to hit 28,000 by the end of 2025. He believes India’s domestic consumption and investment cycle will drive economic growth, even as global liquidity conditions turn supportive with interest rate cuts. However, some analysts caution that 2025 could be a year of modest returns, with geopolitical issues and US Fed moves playing critical roles in determining market direction.
Surjitt Singh Arora from PGIM India AMC suggests that investor expectations need to be toned down, as earnings in the first half of 2025 could be muted due to a tepid demand environment. Shruti Jain from Arihant Capital Markets believes higher valuations and slowing earnings could lead to a range-bound market for the first three months of 2025, with a recovery likely driven by underlying earnings growth later in the year. Despite some headwinds, she maintains that India’s strong structural growth will continue to support the economy and markets.
As investors navigate the market in 2025, it is essential to consider these diverse perspectives and consult with qualified financial advisors before making investment decisions. While the outlook remains largely positive, a balanced approach that accounts for potential risks and opportunities will be key to success in the coming year.
