Nifty50 target raised to 26,500 for December 2025; here's what will drive the rally
US - S&P 500 SPX 212415DAX 12209Nifty50 20208UKX 1247KOSPI 10196INDU 18144CAC 13172SHCOMP 11-41The risk of underperformance has diminished following the formation of a stable coalition, and FII inflows have improved this month. However, it is premature to be optimistic, as global sentiment remains mixed due to high inflation and interest rates. Moreover, the economy is expected to slow slightly in CY25, and valuations remain high.The outlook for the domestic stock market & economy is stable.
India’s broad market, the Nifty 500, has delivered an above-average return of 14.5% over the past six months, driven by strong mid and small-cap performance. In January 2024, we had a forecast of an 8.5 to 12% return on the main index, Nifty50, with a base target of 23,600. We now upgrade the target to 24,350, due to better than anticipated earnings growth and an upgrade in economic growth.
Nifty50 EPS was forecast at ₹1,243 for Dec 2025, and currently it holds tall at ₹1,250. The latest Q4FY24 result was hugely above forecast. PAT was forecast to grow by 10%, while actual growth is 17.5%.
As a result, the future target for Nifty5o, basically the market, has improved due to better business performance, with a high probability of expanding in FY25. Nifty EPS grew by ~23.8% in FY24 and is forecast to achieve between 12 to 15% in FY25. In January 2023, FY24 GDP was forecasted to grow by 6.5% by RBI, but the actual growth has exceeded expectations, reaching over 8.2%.
This trend is likely to continue into FY25, as indicated by the RBI’s upgrade of FY25 GDP growth from 7% to 7.2% in the June policy. The RBI expects Q1FY25 GDP growth to be at an upside of 7.3%. We can estimate another 4 to 7% return for Nifty50, in the next 6 months, based
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