CA Rudra Murthy says 2025 will be the year to buy value, recommends top 10 stocks to buy, sectors he is bullish on

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Subscribe to enjoy similar stories. CA Rudra Murthy B.V., founder director of Vachana Investments and author of the Amazon bestseller ‘Mind Markets & Money’, has experienced several stock market cycles in his nearly two-decade-long investing career. Given the current market environment, he believes investors will be better off chasing value rather than momentum in 2025, with a focus on large-cap stocks.

With many key events now behind, the Indian stock markets face a challenging year ahead. The benchmark indices Nifty 50 and Sensex are already down nearly 9-10% from their all-time highs reached in September, bringing them close to correction territory. Key headwinds such as foreign institutional outflows, uncertainty over central banks' rate cut trajectories, inflation, growth concerns, and weak earnings paint a bleak outlook for the year.

In this context, Rudra Murthy suggests that large-cap stocks will perform better in 2025, and investors should steer clear of mid-cap and small-cap stocks where valuation comfort is lacking. "Stocks trading at P/E multiples of 80 times, 100 times, or even 150 times, will likely see substantial corrections in the first half of next year," predicted Rudra Murthy. Investors need to be clear that the stocks they choose in 2025 should demonstrate good quarterly performance and come with reasonable valuations, he added.

A quick glance at the BSE Smallcap and BSE Midcap indices reveals that many stocks trade at P/E ratios exceeding 100 times, with some even at exorbitant valuations of 900 times (like Jain Irrigation) and a staggering 3,000 times (such as Delhivery). In contrast, only one stock in the BSE Sensex, the newly-added tech company Zomato, has a P/E ratio over 100 times. Rudra