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Why HSBC has downgraded India to ‘neutral’ from ‘overweight’ - check Sensex target for 2025

| TOI Business Desk | TIMESOFINDIA.COM | Jan 9, 2025, 11:41 IST
HSBC has downgraded India's outlook to 'Neutral' from 'overweight... Read More
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HSBC has revised its stance on India to 'Neutral' from 'overweight'. It has also set a BSE Sensex target of Rs 85,990 for 2025, citing reduced corporate profits and high valuations as primary concerns.

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Despite India's impressive 25% annualised growth in recent years, HSBC considers this rate unsustainable. The firm has notably decreased its FY25 earnings growth projection for the Nifty 50 to 5% from the previous 15%, indicating immediate profitability challenges for Indian firms, according to an ET report.

The current valuation metrics at 23 times forward earnings are considered high by HSBC, suggesting potential overvaluation in the market when combined with diminished earnings growth expectations.

These circumstances may influence investors to reassess their Indian market positions, potentially affecting investment inflows and market performance in the short term.

Also Read | ‘Real money is with Gujjus...let that sink in’: Zerodha CEO Nithin Kamath makes interesting observations in social media post

HSBC's modified outlook reflects a more reserved approach towards Indian equities, supported by reduced earnings forecasts and valuation concerns.
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Recent market activity shows continued volatility in Indian stock market indices. Financial and consumer sector selling pressured the markets on Wednesday, whilst uncertainty regarding US Federal Reserve rate cuts added to investor wariness.

The BSE Sensex concluded at 78,148.49, declining by 50.62 points or 0.06%, whilst the Nifty 50 finished at 23,688.95, dropping 18.95 points or 0.08%.

Top Stocks To Buy For 2025

Top stocks to buy for 2025: Which are the best stocks to buy for the New Year 2025? Which stocks should you invest in for the long-term? Financial experts advise investors to select high-quality companies with appropriate valuations. ET Wealth has identified nine specific stocks. These selections feature companies where analysts have revised upward their full-year earnings or PAT projections for both 2024-25 and 2025-26. These nine selected stocks currently indicate potential double-digit appreciation by December 2025. We take a look at the top stocks for 2025:


Disclaimer: The opinions, analyses and recommendations expressed here do not reflect the views of The Times of India. Always consult with a qualified investment advisor or financial planner before making any investment decisions.

Godrej Properties stock outlook 2025: Godrej Properties company maintains a robust pipeline of upcoming launches (spanning Gurugram, Noida, Mumbai, Pune and Hyderabad) scheduled for the latter half of 2024-25.


Current price: Rs 2,899/-


Upside potential: 25.9%


Given its established brand presence and sustained market demand, the company is well-positioned to surpass its projected targets for 2024-25. Additionally, its strategic emphasis on economically advantageous projects and consistent sales performance has resulted in substantial operating cash flow. These positive cash flow trends are anticipated to continue through the remainder of this fiscal year.

HDFC Life Insurance Company stock outlook 2025: Market experts highlight several key strengths of the organisation, including a well-balanced product portfolio, efficient channel operations, robust distribution infrastructure, continuous product development, emphasis on agency networks through franchise investments, and enhanced persistency across various segments.


Current price: Rs 633/-


Upside potential: 27.9%

PNB Housing Finance stock outlook 2025: An analysis from ICICI Securities, published following the Q2 results, highlights several crucial strengths of the company.


Current price: Rs 965/-


Upside potential: 24.4%


The strengths include its transformed operational approach emphasising profitable retail portfolios, stringent monitoring of asset performance, enhanced emphasis on resolving corporate non-performing assets, substantial return on assets, and sophisticated liability administration.

Max Financial Services stock outlook 2025: Following the September quarter results, Elara Securities published a report highlighting the company's potential for growth surpassing both industry and private sector rates.


Current price: Rs 1,165/-


Upside potential: 21.9%


This optimistic outlook stems from enhanced distribution via agency networks, significant expansion in the Axis channel following rebranding initiatives, and robust product portfolio offerings.

Inox Wind stock outlook 2025: A Nuvama analysis on Inox Wind indicates strong growth prospects for the company, supported by several key factors. These include annual industry tailwinds of 12-14GW TAM, advanced technological capabilities, profitable maintenance service operations and sound financial health.


Current price: Rs 208/-


Upside potential: 17.7%

Prestige Estates Projects stock outlook 2025: A report by Antique Stock Broking, published following the September quarter results, indicates that the firm's diversification approach positions it well to benefit from the current housing growth phase.


Current price: Rs 1,751/-


Upside potential: 16.5%


The analysis highlights the organisation's robust market position in three crucial regions—Bengaluru, Hyderabad, and MMR—whilst noting its strategic expansion into emerging markets such as Noida, Chennai, and Pune as significant advantages.

Power Finance Corporation stock outlook 2025: Following the September quarter results, a report by Motilal Oswal highlighted several positive aspects of the financial performance.


Current price: Rs 517/-


Upside potential: 16.0%


The analysis emphasised four crucial strengths: clear prospects for loan expansion, robust earnings progression, effective management of stressed assets, and sound return metrics.

Hindustan Aeronautics stock outlook 2025: Market experts highlight HAL's exceptional operational performance, impressive return metrics, potential for international sales, favourable price levels and India's expanding air defence requirements as crucial advantages.


Current price: Rs 4,628/-


Upside potential: 15.5%


The firm's recent elevation to Maharatna PSU status by the government has granted it greater independence in financial decisions and operational matters.

Amber Enterprises India stock outlook 2025: Following the September quarter results, Anand Rathi published a report projecting significant growth for the company. The analysis forecasts an increase in revenue from 25.6% in 2023-24 to 37% in 2026-27.


Current price: Rs 5,724/-


Upside potential: 16.6%


Additionally, the Return on Capital Employed (RoCE) is expected to rise from 8.3% to 20.6% during the same period, primarily driven by positive momentum in electronics and mobility sectors.



Stay informed with the latest Business News on Times of India. Explore updates on International Business, gain insights with Financial Literacy tips, and make use of Financial Calculators. Don’t forget to check the list of Bank Holidays in 2025, including Bank Holidays in January.



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