HSBC has projected that growth will likely remain weak in the upcoming quarters, with valuations staying high and the Budget not expected to boost sentiment significantly. The bank highlighted that consumer-related sectors such as FMCG, retail, white goods, autos, food deliveries, travel, and leisure are poised to benefit from the Budget measures, indirectly benefiting companies in credit cards, personal loans, mutual funds, and insurance. On the other hand, a slowdown in capital expenditure is anticipated to normalize growth expectations for infrastructure-linked companies in construction, capital goods, and cement, many of which are currently trading at elevated valuation multiples.
The bank maintained a neutral stance on India from a regional perspective, citing concerns over soft growth, high inflation, and sluggish government capex. The strong dollar and high yields in the global macro environment provide limited support to Indian markets, which have been under pressure since September 2024.
Emkay brokerage expects a shift in the market from industrials and manufacturing towards consumption, with consumer discretionary as a preferred play in this theme. While staples and financials also stand to gain, both sectors face a mismatch between growth and valuations. The brokerage has kept its Nifty target for December 2025 at 25,000, based on a trailing P/E of 21.1x.
Elara Securities predicts a gradual return to growth-oriented stocks in the market, favoring consumption over value styles associated with capital goods, infrastructure, and PSUs.
As the market digests the Budget announcements, it is likely to refocus on earnings and the upcoming RBI policy. Nifty is currently trading at 19.9x on a one-year forward basis.
Motilal Oswal Financial Services advises an overweight position on consumption, IT, BFSI, industrials, healthcare & real estate, and an underweight stance on oil & gas, cement, automobiles, and metals. The firm recommends that investors monitor the earnings outlook and the upcoming RBI policy to navigate the market in the coming months.
