BofA sees Nifty touching 25,000 by December, expects negative returns for small, midcaps in 2025

BofA sees Nifty touching 25,000 by December, expects negative returns for small, midcaps in 2025

Bank of America (BofA) Securities said it expects the benchmark index Nifty 50 to touch 25,000 by December 2025 due to its cheaper valuations after recent correction. This reflects an upside potential of nearly 11 percent from the current closing level of 22,545. However, BofA remained conservative on its earnings estimates in comparison to broader street expectations.

Also, BofA Securities analysts led by Amish Shah expect small and midcaps to deliver negative returns in 2025 as they are still expensive on most fundamental metrics.

BofA said that it sees telecom, financials, industrials, energy, IT and autos driving 90 percent of Nifty's earnings growth. It further said that it favours rate-sensitive domestic cyclicals such as financials and autos, expecting RBI rate cuts to boost economic and credit growth.

BofA Securities has also come up with a list of 12 stock ideas with a 'Buy' rating. Among them, HDFC Life holds the biggest upside potential. BofA set a target price of Rs 875 for the stock, implying an upside potential of nearly 42 percent from the current market price.

It was followed by automaker Mahindra & Mahindra (M&M). BofA kept the target price at Rs 3,650 per share for the stock of the automaker. This suggests an upside potential of nearly 33 percent from the current levels.

The entire list of BofA's stock ideas is given below:

Notably, Sensex and Nifty ended the day on a positive note, as markets made recovery for the second consecutive day following strong losses. Sensex closed nearly 610 points higher at 74,340.