HSBC sees Sensex at 90,520 by end of 2025, a potential upside of 15%

HSBC has come out with a India Strategy note, maintaining an Overweight with a Sensex target of 90,520 by the end of 2025, indicating at a potential upside of 15%.

The note says that while India's growth is stabilizing at a lower level, though still favourable, the earnings per share (EPS) growth is concentrated in the small and mid-cap space. These companies from the broader market universe are expected to see growth rates of around 30%, in contrast to the 12% growth anticipated for large-cap names. This trend highlights that the segment most accessible to foreign investors — the largecap pool — is witnessing a slower pace of growth.

Despite the slowdown, India is poised to stay as one of the fastest-growing economies in 2025, said HSBC. The HSBC note also unveiled the Asia Stock Ideas 2025 list, with only two Indian companies featured as part of it - Axis Bank and KIMS.

Soon after after General Elections in June, an HSBC note had maintain a mild 'Overweight' on Indian equities over 6-12 months, adding that the long-term fundamentals remain supportive. "Public capex, focus on infrastructure and support for hi-tech and new emerging manufacturing sectors is likely to continue," the June 2024 note had said.