Market outlook 2025: IT, chemicals, banks among top sectors to invest

Experts suggest investors should expect moderate returns as the market adjusts to global macroeconomic challenges

In 2024, Indian benchmark indices have given decent returns even with uncertainties surrounding the markets. The BSE Sensex has gained 9.6 per cent year-to-date (Y-T-D), while the National Stock Exchange (NSE) Nifty rose 8.4 per cent. 

 

As we look ahead to 2025, banks, chemicals, industrials, power, information technology (IT) are among the few sectors where analysts see investment potential.

 

"While market valuations may remain stretched in some sectors, robust earnings growth in key industries could provide support. Investors should expect moderate returns as the market adjusts to global macroeconomic challenges," said Sonam Srivastava- founder and fund manager, Wright Research.

 

 

Goldman Sachs: Global brokerage is constructive on insurance as life insurers are expected to see healthy growth. It is 'Overweight' on auto as the sector could continue to benefit from premiumisation towards SUVs, and recovery in 2-wheeler demand supported by electrification and a pickup in exports. It is also 'Overweight' on real estate on the back of decent demand visibility.

 

Infotech, pharma, telecos, and internet sectors look attractive with good growth potential.

 

Consumer staples seem as a good bet among the defensive sectors. However, it remains 'Neutral' on utilities as valuations look elevated which could lead to the sector being range-bound in the near term.

 

Motilal Oswal: The domestic brokerage is 'Overweight' on IT, healthcare, Banking, Financial Services and Insurance (BFSI), consumer discretionary, industrials, real estate, and themes

like capital market, EMS, digital e-commerce, and hotels in 2025.

 

The BFSI sector looks promising as it navigates the current uncertainties. The expected repo rate cuts in Q1CY25 should further enhance profitability. The capital markets theme remains constructive, driven by the rise in retail participation, surge in demat accounts, and the ongoing financialisation and digitisation of savings.

 

After two years of depressed technology spending, the US tech sector is likely to see a recovery under President Trump’s new regime, coupled with continued rate cuts. This trend should be beneficial for the Indian IT sector. The consumer discretionary sector stands to benefit from rapid shifts in consumer purchasing behavior, with a transition from unorganised/local to organised retail channels. 

 

Meanwhile, the brokerage is 'Underweight' on metals, energy, and automobiles.

 

ICICI Bank, HCLTech, L&T, Zomato, NAM India, Mankind, Lemon Tree, Polycab, Macrotech Developers, and Syrma SGS are Motilal Oswal's top picks for 2025.

 

Geojit Financial Services: The power sector looks attractive to Gopinath Natarajan, CEO Asset Management, Geojit Financial Services on the backdrop of the government’s continued focus on driving 'make in India' and a sharp revival in the power sector capital expenditure across generation, transmission and distribution (T&D).

 

Anand Rathi: Narendra Solanki, head fundamental research - investment services, Anand Rathi Shares and Stock Brokers expects chemicals, electronics manufacturing services (EMS), electrical equipment, and wires, to be well-positioned in 2025 with the revival of "China Plus One" manufacturing strategy after the return of the Trump administration in the US.

 

The China Plus One strategy, also known as C+1 or Plus One, is a business strategy that involves diversifying manufacturing and sourcing beyond China. 

 

Wright Research: Srivastava's top sectoral bets for 2025 include pharmaceuticals and consumer staples among defensive sectors. Banking and financial services on the backdrop of robust credit growth, improving asset quality, and strong demand for financial products.

 

IT due to continued digitisation across industries and infrastructure and industrials will gain momentum as the government pushes large-scale projects, supported by rising private capex investments.

 

StoxBox: Stock advisory platform StoxBox suggests investing in banking on the back of anticipated rate cuts in 2025; chemicals as it is expected to recover after 2024 supply chain disruptions and pricing pressures; Cement as demand is expected to rise due to real estate activity, government infrastructure spending, and rural housing initiatives.

 

Further, FMCG looks attractive to StoxBox as strong growth is expected in 2025, due to rural demand, favourable monsoons, rising agricultural income, and increased digital accessibility. IT is also poised for good growth in 2025 and the pharma as industry is expected to grow by 12-15 per cent in 2025.