23,000 or 25,000: Where will Nifty land by December end? Top brokerages weigh in

Sensex and Nifty extended their gains to the third consecutive session on Friday, driven by positive global sentiment after former US President Donald Trump announced a one-month exemption on new tariffs for imports from Mexico and Canada, providing relief to US automakers.

Despite the recent uptrend, Indian equity markets have been in a downtrend over the past five months. During this period, the Nifty has declined by 15 percent, while small-cap stocks have faced a sharper correction of 25 percent.

As the Indian stock market navigates global and domestic uncertainties, financial experts and brokerages have put forth varying projections for the Nifty 50 index by December 2025. While some remain bullish, expecting the index to touch 25,000 or even higher, others foresee a more conservative trajectory. The divergence in estimates highlights the mixed sentiment surrounding India’s economic and market outlook for the upcoming year.

Bank of America Securities: 25,000 Target

Bank of America (BofA) Securities has set a Nifty 50 target of 25,000 by December 2025, citing attractive valuations after recent corrections. This implies an upside potential of nearly 11 percent from the current level of 22,545. However, BofA remains cautious on earnings estimates compared to broader street expectations. The firm anticipates that small and midcap stocks will deliver negative returns in 2025, as they remain overvalued on fundamental metrics.

BofA identifies telecom, financials, industrials, energy, IT, and autos as the key sectors that will drive 90 percent of Nifty’s earnings growth. It also favors rate-sensitive domestic cyclicals such as financials and autos, expecting rate cuts by the Reserve Bank of India (RBI) to stimulate economic and credit growth.

Axis Securities: Base Case at 24,600

Axis Securities has revised its base-case December 2025 Nifty target to 24,600, citing risks from uncertain trade policies, rupee depreciation, and relatively high valuations. The brokerage noted that India’s VIX remains below its long-term average, suggesting a neutral market sentiment but with prevailing short-term volatility.

Axis Securities outlined three potential scenarios:

Bull Case: Under a Goldilocks scenario with reduced volatility and a successful soft landing in the US market, Nifty could reach 27,000, valued at 21x earnings.

Base Case: Nifty at 24,600, factoring in current economic conditions.

Bear Case: If global uncertainties, policy shifts under a Trump administration, and inflation pressures mount, Nifty could drop to 22,000, valued at 17x earnings.

Despite short-term risks, Axis Securities views large caps, quality stocks, monopolies, and market leaders as better positioned for outperformance in the near term.

Nomura: Conservative at 23,784

Global brokerage Nomura has taken a cautious stance, pegging its December 2025 Nifty target at 23,784. It factors in downside risks to earnings along with slightly stretched valuations, estimating stock market returns between -8 percent and +9 percent over the next year.

Nomura notes that Nifty is currently trading at 19.4x one-year forward earnings, near its three-year average of 19.2x. However, the brokerage warns that a slowdown in earnings growth and a potential rise in the equity risk premium could push market valuations below recent averages. The firm draws comparisons to the pre-COVID market, where Nifty traded in a tighter range of 16-19x earnings.

InCred Equities: Bullish at 27,000

Domestic brokerage firm InCred Equities has taken an optimistic approach, setting a Nifty 50 target of 27,000 over the next 9-12 months. This represents a potential upside of 21 percent from the current levels.

InCred expects the index to undergo a time correction in the coming months, with a strong upward move starting from June 2025. The brokerage points out that the recent market correction has brought Nifty’s valuation below the 10-year mean level of 19x one-year forward P/E, nearing -1SD territory. Furthermore, the real earnings yield has turned positive for the first time since the COVID-19 pandemic, which could help limit downside risks.

Overall, the projections for Nifty 50 by December 2025 vary significantly, with targets ranging from 23,000 to 27,000. Investors will need to weigh these perspectives against evolving macroeconomic trends and market developments before making strategic decisions.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.