As we step into 2025, many investors are closely analyzing the stock market, seeking opportunities to add quality stocks to their portfolios for the year ahead. The Indian stock market, over the years, has proven to be an attractive place for long-term investors looking for substantial returns, and 2024 was no different.
In fact, 2024 was a solid year for the Indian stock market, with both the major indices—the NSE Nifty 50 and the S&P BSE Sensex—showing positive growth. Both indices rose by 9% during the year, marking the ninth consecutive year of profitability for investors. This continued upward trend reflects the resilience and growth potential of the Indian market, making it an ideal choice for long-term wealth creation. The Sensex hit an all-time high of 85,978 points, while the Nifty reached 26,277 points on September 27, 2024.
One particularly notable observation from 2024 was the remarkable performance of mid-cap and small-cap stocks. Over the past five years, mid-cap stocks surged by an impressive 234%, while small-cap stocks rose by 221%. This performance indicates that investors who diversified their portfolios into smaller companies have seen far greater returns compared to those who have stuck to large-cap, well-established firms. These figures reinforce the importance of considering a balanced portfolio that includes both large and small companies for optimal returns.
Looking ahead to 2025, investors are eager to identify the best stocks to invest in. Axis Securities Limited has shared a list of nine stocks that it believes have strong potential for growth in the year ahead. These stocks were carefully selected based on their market performance, potential growth, and industry positioning. Let’s take a closer look at these top stock picks for 2025:
Axis Securities’ Top Stock Picks for 2025:
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Shriram Finance Ltd Shriram Finance is Axis Securities' top pick, with the stock priced at ₹2,930. The firm projects that the stock could rise to ₹3,825, offering a potential upside of 31%. Shriram Finance has shown strong growth in recent years, making it a favorite among analysts.
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Fortis Healthcare Ltd Fortis Healthcare, which is priced at ₹672, has a target price of ₹860. This suggests a possible gain of 28%. The healthcare sector continues to be one of the most lucrative industries in India, and Fortis is well-positioned to capitalize on this trend.
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Prestige Estates Projects Ltd Prestige Estates, at ₹1,748, is another promising stock for 2025. Axis Securities expects the stock to rise to ₹2,195, providing a 26% return. The real estate sector is expected to benefit from rising demand and continued development, making this a good investment.
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City Union Bank Ltd City Union Bank, priced at ₹174, has a target price of ₹215, suggesting a 24% upside. The banking sector continues to show strong growth, and City Union Bank's focus on improving digital banking and expanding its footprint makes it a promising choice.
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Ambuja Cements Ltd Ambuja Cements, currently trading at ₹550, is expected to rise to ₹675, offering a 23% return. The cement sector is experiencing strong demand driven by infrastructure development, making Ambuja Cements an attractive pick.
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DOMS Industries Ltd At ₹2,553, DOMS Industries has a target price of ₹3,120, suggesting a 22% potential gain. This manufacturing company is benefitting from rising demand in the industrial sector, particularly in areas like automation and manufacturing solutions.
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Ethos Ltd Ethos Ltd, which is currently priced at ₹3,112, is expected to reach ₹3,750. This 21% rise is driven by strong demand for luxury watches, and Ethos has positioned itself as a leader in the luxury retail segment, making it a lucrative investment.
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Bharti Airtel Ltd Bharti Airtel, trading at ₹1,600, is expected to rise to ₹1,880, offering an 18% return. The telecommunications industry in India is growing rapidly, with Bharti Airtel being one of the major players benefiting from the increasing demand for data services and digital infrastructure.
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Cipla Ltd Cipla, currently priced at ₹1,489, could rise to ₹1,735, offering a 17% gain. The pharmaceutical sector remains a key player in India's economy, with Cipla benefitting from the country's rising healthcare demands and increasing exports.
Axis Securities is optimistic about India's growth in 2025, with expectations of continued strong performance in the stock market. They project the earnings per share (EPS) of Nifty 50 companies to grow by 7.6% in FY25. This growth is anticipated to accelerate to 13.7% in FY26 and 11% in FY27. Such robust growth reflects the strength of the underlying economy, supported by a strong real estate cycle, a recovery in private capital expenditure (capex), and consistent construction activity.
Despite these optimistic projections, Axis Securities also highlights a few risks that could influence market performance in 2025. Global macroeconomic uncertainties, inflationary pressures, and potential earnings downgrades in the third quarter are factors that investors should keep in mind. The potential for changes in US government policies after Donald Trump’s re-election, shifts in international trade rules, and any changes in the US central bank’s interest rate policies could have a ripple effect on global markets.
Additionally, fluctuations in oil prices and currency rates could also play a critical role in shaping India’s economic environment. Domestically, investors should keep a close watch on the upcoming Indian Union Budget and any potential rate cuts by the Reserve Bank of India (RBI) as these events could have significant implications for the market.
Overall, 2025 holds promise for investors, with a combination of strong economic fundamentals, growing industries, and robust stock market growth. However, investors need to remain vigilant and adaptive to market dynamics in order to maximize their returns. By monitoring key factors, staying informed about the latest economic developments, and diversifying their portfolios, investors can position themselves for success in the new year.
