Goldman Sachs, the New York-based investment bank, has outlined its strategic vision for Indian equities in 2025. The firm identifies major growth potential in sectors such as housing, agriculture, defense, tourism, and the rapidly growing segment of affluent consumers, which it believes will drive the next phase of economic expansion in India. 

That said, analysts at Goldman Sachs believe the near-term outlook for Indian equities remains cautious. Weak earnings growth and high valuations are likely to keep the market range-bound over the next three months.  

As such, Goldman Sachs anticipates the Nifty50 index to hit 24,000 (+2 per cent) over the next three months, followed by a back-loaded recovery to a 12-month target of 27,000, fuelled by underlying earnings growth.

“While the MSCI India index has seen an 8 per cent valuation de-rating, it still trades at nearly 23-times forward price-to-earnings (PE), well above the 10-year average and our fair-value estimate of 21-times PE. We forecast MSCI India earnings growth of 12 per cent, 13 per cent, and 16 per cent for CY 2024, 2025, and 2026, respectively—slightly below consensus estimates,” Goldman Sachs said.