Stock Market Outlook 2025: HDFC Securities Bullish on These Sectors – List and Analysis

HDFC Securities has released its sectoral outlook for 2025, offering key insights into the sectors that are set to drive stock market trends in the coming year. 

While the macroeconomic environment is expected to be shaped by easing interest rates, a revival in rural consumption, and a robust focus on infrastructure, the brokerage has identified a mix of positive, neutral, and negative trends across various industries.  

HDFC Securities Bullish On These Sectors  

Banking, Financial Services, and Insurance (BFSI)  

The BFSI sector stands out with a positive outlook. HDFC Securities anticipates a strong performance as the rate cut cycle begins in the fourth quarter of FY25, leading to credit growth in rate-sensitive segments such as affordable housing and two-wheelers.  

“Large banks with granular deposits and diversified loan books are expected to benefit the most,” notes the brokerage. However, elevated leverage among microfinance borrowers remains a concern for asset quality.  

 Industrials & Infrastructure  

A favourable demand environment is predicted for industrial and infrastructure players, especially in the second half of FY25, as project awarding rebounds post-elections and monsoon disruptions.  

“With a capex-focused budget likely in FY26, the sector is set for steady growth,” the report highlights.  

Cement  

The cement sector is set to benefit from infrastructure-driven demand growth, with pricing pressures easing after monsoon disruptions. Key players are expected to implement price hikes, leading to superior earnings growth.  

Real Estate  

According to the brokerage firm, luxury real estate continues to thrive, driven by rising disposable incomes. Affordable housing is also expected to pick up, supported by rate cuts in Q4FY25 and rural economic recovery.  

“The demand environment remains strong, with FY26 expected to see heavy fresh launches,” states the brokerage.  

HDFC Securities Gives Neutral Rating To These Industries

IT & Exchanges  

Gradual demand recovery, particularly in BFSI, and healthy deal bookings will drive growth in the IT sector. However, rich valuations are likely to cap stock returns.  

Consumer Discretionary  

According to the brokerage, this sector is expected to witness mixed performance. While domestic manufacturing will boost consumer durables, segments like quick service restaurants (QSRs) and groceries may face challenges due to increased competition.  

 Chemicals and Pharma  

The brokerage firm notes that the long-term outlook for chemicals remains positive, though medium-term revenue growth may be hindered by Chinese competition. Similarly, the pharma sector is buoyed by strong chronic therapy demand, though high valuations limit upside potential.  

HDFC Securities Gives Negative Rating To These Industries 

Consumer Staples  

HDFC Securities believes that urban consumption is set to remain muted due to persistent inflation, while rural demand offers a glimmer of hope. Earnings growth is expected to moderate as the benefit of commodity deflation fades.  

Automobiles  

The sector faces challenges, with entry-level vehicles showing gradual recovery but muted growth expected in premium passenger vehicles and commercial vehicles. The brokerage firm believes that elevated valuations further weigh on stock performance.  

Oil & Gas  

HDFC Securities underlines the weak refining and marketing margins, coupled with pressures from the energy transition, which are expected to impact the earnings of oil marketing and city gas distribution companies.  

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