The Global brokerage firm, Citi has raised its Nifty 50 target to 26,000 by December 2025. According to the firm, strong macroeconomic fundamentals, recovering public investments, and easing monetary policies are some key reasons for this upgrade. The firm remains ‘Overweight’ on India and is expecting the GDP growth to accelerate in the coming years.
4 reasons driving Citi upgrade on India
Let’s take a look at the four key reasons driving Citi’s bullish outlook on Indian equities:
Citi on India: Economic growth on the upswing
According to the brokerage report, the Citi economists project India’s real GDP growth to rebound to 6.5% in 2025, up from the recent low of 5.4% YoY in June-September 2024.
Moreover, the brokerage in its report noted, “India’s growth trajectory remains resilient, supported by structural reforms and fiscal policy measures.”
The recent Union Budget is also expected to boost consumption through personal income tax cuts, which could enhance consumer sentiment and spending.
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The brokerage also in its report pointed out that the Nifty current level is trading at around 19x its one-year forward earnings, which is close to its five-year long-term average (LTA).
While slightly above the LTA relative to emerging markets, the brokerage believes India’s earnings outlook remains intact.
As per the brokerage firm, the third quarter corporate earnings have largely met expectations, with key sectors like banking, pharmaceuticals, and telecom showing resilience. Citi continues to remain bullish on financials, insurance, and telecom stocks, while staying cautious on IT services, metals, and discretionary consumer sectors.
Citi on India: Foreign outflows Vs strong domestic inflows
Despite over $8 billion in foreign investor outflows YTD, domestic equity inflows have remained strong, averaging over $4 billion per month.
The brokerage notes that the foreign investor positioning in India is currently Citi notes that foreign investor positioning on India is currently at its lowest level in two decades, which could mean a potential comeback of FII in the future.
The brokerage expects the market to focus on key investment themes like consumption trends, Capex cycle, Sector specific performance.
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The RBI has recently initiated a rate cutting cycle,
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