2025: Tale of 2 halves; Zomato among MOFSL's 10 picks

After an eventful 2024 with Nifty delivering 13% returns on a year-to-date basis, 2025 could be a tale of two halves according to Motilal Oswal Financial Services, which sees consolidation in the first six months while a recovery in the next. The brokerage remains upbeat on the prospects of these 10 stocks viz. ICICI Bank, HCL Technologies, Larsen & Toubro (L&T), Zomato, Nippon Life India Asset Management, Mankind Pharma, Lemon Tree, Polycab, Macrotech Developers, Syrma SGS — calling them as top bets of next year.

“The year 2025 could unfold as a tale of two halves. The first half may continue to see market consolidation, while a recovery could take place in the second half. Indian markets are likely to face significant influences from a combination of global and domestic economic events. The anticipated rate cut by the RBI in February 2025, the ongoing trend of US rate cuts, and the expectations surrounding trade policy changes post Donald Trump taking over as US President in Jan’25 will contribute to market volatility.

This year's closing will mark the 9th consecutive year of positive gains for Nifty. Markets navigated significant events through the year including global geo-political issues, general election followed by the Budget where dips were swiftly met with strong buying activity.

5 triggers for 2025


1) Union Budget: The annual event will offer important signals to the market.

2) Earnings: After a subdued earnings performance in the first half of FY25, earnings are expected to recover in H2, driven by increased rural spending, a buoyant wedding season, and a pickup in government spending. MOFSL expects earnings to grow by 16% CAGR over FY25-27E. The brokerage remains optimistic about the long-term trend ,based on the strength of corporate India’s balance sheets and the prospects for robust, profitable growth.

3 ) Moderation in valuation: The recent market correction and the moderation in valuations offer an opportunity to add selective bottom-up stock ideas. In the last 2 months, the market has corrected 11% from its all-time high. This correction marked the third major decline since the COVID-19 pandemic in 2020, with unprecedented selling by Foreign Institutional Investors (FIIs) due to a combination of domestic and global factors.

4) FII trends: FIIs sold more than Rs 1.5 lakh crore in October and November — the highest-ever two-month selling in history. Earnings moderation and elevated valuations in midcaps and smallcaps, along with a strengthening dollar index after Donald Trump’s election victory, led to FIIs shifting away from India.

5) Government spending: Investors expect enhanced government spending, favourable policy changes, and the expedited completion of key infrastructure projects.

MOFSL's 2025 strategy


The latest correction in Indian markets has cooled off valuations in largecaps, even as mid- and smallcaps continue to trade at premium to their historical averages. In the near term, MOFSL suggests investors to maintain an overweight position in large-cap stocks while selectively allocating to mid and small-cap stocks.

In terms of sectors, it is overweight on IT, healthcare, BFSI, consumer discretionary, industrials, real estate, and niche themes like capital market, EMS, digital e-commerce, hotels while underweight on metals, energy, and automobiles.

Also Read: Year-ender 2024: Zaggle, Oracle and 5 other SMIDs rule IT sector in CY24 with up to 150% returns. How about 2025?

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)