Nomura Nifty aim 2025: Global brokerage Nomura has set the December 2025 Nifty objective at 23,784, citing a negative forecast for India's stock markets in calendar year 2025.
Nomura anticipates stock markets to provide returns in the range of -8 percent to +9 percent over the next year, taking into account negative risks to earnings and relatively expensive valuation.
"The Nifty is currently trading at 19.4 times one-year ahead consensus earnings, which is close to the previous three-year average of 19.2x. Over the last three years (CY21-24), the market has traded between 17 and 23x. This compares to the pre-Covid (2017-19) average of 17.7x, when the market traded between 16 and 19x. In a co-authored note with Amlan Jyoti Das on Wednesday, January 15," Saion Mukherjee of Nomura stated that a slowdown in earnings growth and a possible increase in the equity risk premium could push the multiples below the previous three-year average in the near future.
In order to get to the December 2025 Nifty objective of 23,784 in their base case scenario, Mukherjee and Das have given their December 2026 earnings forecasts an 18.5x multiple, accounting for 5% lower earnings than consensus estimates. This suggests a mere 0.5% increase from the existing levels.
They have put the Nifty 2025 objective at 21,856 and allocated a 17x earnings multiple for December 2026 in their bear scenario. This implies that the Nifty could drop 7.7% from its current position.
Conversely, Nomura has set a bull case Nifty 2025 target of 25,712, which is 8.6% higher than the present level.
Nomura's 2025 Strategy
As an investment strategy, Nomura encourages investors stay highly “selective” and bet on stocks and/or sectors with relative valuation comfort.
Nomura is "underweight" in consumer durables and discretionary items, automobiles, capital goods, defense, cement, hospitals, and metals; "overweight" in financials, consumer staples/FMCG, oil and gas, pharmaceuticals, telecom, power, the internet, and real estate; and "neutral" in information technology (IT) services and infrastructure.
