Nifty Can Scale 28,700 By 2025-End, Says Axis Securities

India's benchmark index, NSE Nifty 50, can scale the 28,700-mark in twelve months time, projected Axis Securities Ltd. in its bull case scenario for the index.

"In the bull case, we value Nifty at 22x, translating into a December 2025 target of 28,700. Our bull case assumption is based on the Goldilocks scenario, which presumes an overall reduction in volatility and the success of a soft landing in the US market," it said.

The brokerage believes that the likelihood of this scenario is "very high" at the current juncture.

Meanwhile, in a base or neutral case scenario, Axis Securities sees Nifty 50 scaling the 26,100-mark by December this year.

"In our base case, we assume the continuation of the political stability in a coalition government, faster GDP growth rate vs. other emerging markets, stable monsoon, stable oil prices, and one to two rate cuts of 25 bps each in the next one year," it said.

Meanwhile, in a bear case scenario, Axis Securities values "Nifty at 18x", which translates into a December 2025 target of 23,500. "However, the likelihood of this scenario appears slim at the current juncture," it noted.

The stock market will closely monitor the upcoming Union Budget for fiscal 2026, and the rate cut trajectory of the Reserve Bank of India, Axis Securities said.

"We anticipate one to two rate cuts from the RBI in 2025, contingent upon inflation trends and the broader growth dynamics. These events are expected to keep the Indian equity market volatile, and it could respond in either direction based on the developments," it noted.

Some allocations will likely shift towards China in the near term based on recent developments, the brokerage said. "Nonetheless, we continue to believe in the long-term growth story of the Indian equity market."

With current valuations offering limited scope for further expansion, growth in corporate earnings will be the primary driver of the market returns moving forward, Axis Securities said.

"Hence, bottom-up stock picking with a focus on ‘growth at a reasonable price’ and ‘quality’ would be keys to generating satisfactory returns in the next one year," it stated.