By Vivek Mishra
BENGALURU (Reuters) -India’s stock market is forecast to hit a new high by the end of 2025 and rise further next year, according to a Reuters poll of equity analysts, although there were some concerns about lofty valuations and a possible correction over the next three months.
Foreign investors turned net buyers in April for the first time in four months and the blue-chip Nifty 50 index has climbed nearly 15% from a 10-month low in early April, though it is below an all-time high of 26,277.35 hit in late September.
That momentum came despite a sharp slowdown in economic growth, which likely cooled to 6.3% last fiscal year from over 9% the year before. U.S. President Donald Trump’s renewed tariff threats have also stirred concerns for India’s export-heavy sectors such as pharmaceuticals and chemicals.
The Nifty 50 was forecast to rise 6% to 26,500 by end-2025 from Monday’s close of 25,001.15, and then reach 27,300 and 28,450 by mid-2026 and end-2026 respectively, according to a May 15–27 poll of 31 analysts.
That would mark the longest time the index has taken to recover from a correction in nearly a decade.
The BSE Sensex is expected to climb to 86,100 by end-2025, 89,000 by mid-2026 and 95,000 by end-2026, the poll showed.
“India is starting to look like a safer bet since there aren’t many growth alternatives,” said Yogesh Kalinge, associate director of research at A.K. Capital Services.
“Trump’s policy is not leading to the usual outflows toward the U.S. safe haven and is in fact making emerging markets look better…(But) if you look at valuations, they do look stretched.”
With an average price-to-earnings ratio of 23.52, the Indian stock market ranks among the world’s most expensive, below the U.S. at 25.41 but far exceeding China’s 12.00.
Just over half of analysts who answered an additional question, 15 of 28, said a correction – usually defined as a decline of 10% or more – was very likely or likely. The other 13 said it was unlikely or very unlikely.
“I expect a correction in the short term … because of the inability of large caps to grow as expected. Large-cap index revenue growth is below India’s nominal economic growth, which is worrisome,” said Sreeram Ramdas, vice president at Green Portfolio PMS.
A near 80% majority, 23 of 29, said corporate earnings growth in 2025 would be marginally higher, which included four who said significantly higher. Six said marginally lower or significantly lower.
Profit growth for Nifty 50 companies also remained muted in the December quarter, with most missing estimates. Still, that was an improvement after three notably weaker quarters.
“Earnings growth moderated due to a slower recovery in private sector investment. While some of these pressures have started to ease, the recovery has been insufficient to offset the overall slowdown in corporate performance,” said Ajit Mishra, senior vice president of research at Religare Broking.
“The earnings commentary is not very encouraging so far, so it’s too early to say whether the worst is behind us.”
(Other stories from the Reuters Q2 global stock markets poll package)
(Reporting by Vivek Mishra. Additional reporting and analysis by Pranoy Krishna. Polling by Vijayalakshmi Srinivasan, Veronica Khongwir and Devayani Sathyan. Editing by Hari Kishan, Ross Finley and Mark Potter)
