Nifty downside seems limited, 2025 target at 26,500: Bernstein

Boosting market sentiments in the new year, global brokerage firm Bernstein on Thursday said the Indian market has bottomed out with chances of a downside in Nifty being little. It has given a year-end target of 26,500 on Nifty to signal an upside potential of 12% in 2025.

"For Nifty, the downside seems limited as cutting EPS 5% and multiples to a decade low takes us at 22,000," Bernstein said in a note today.

With the 5% growth in September and a low industrial growth, it said this phase represents a bottoming.


"With policy actions, uncertainties dissolving ahead, and a base reset, the growth may start picking up in 1-2 quarters. Investing ahead of the recovery is suggested. Though some risks to FY26 consensus earnings remain, the mood-spoilers phase is largely behind after the FY25 season of misses," the global brokerage firm said.

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Bernstein has lowered its target PE multiple to 19.5x 2-year forward EPS and built a year-end Nifty 50 target of 26500-representing 12% returns this year, with Nifty Next 50 along similar lines.

Small and midcaps are still rich, it said, adding that in the best-case scenario, it will track Nifty this year.

Among other global brokerages, Citi has given a target of 25,000, Goldman Sachs 27,000, BofA 26,500, and Jefferies 26,600 for Nifty in 2025.

With Sensex and Nifty delivering positive annual returns for the ninth time in a row in 2024, an average of nine brokerage targets for 2025 shows that the Street is expecting a healthy double-digit return of over 16% in the new year despite all the concerns around FII selling, weak earnings, expensive valuations and geopolitical issues.

An ETMarkets poll of 17 brokerages and other market participants shows that almost all of them are bullish on equities and a majority 65% of them see Sensex crossing 90,000 by December 2025.

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