Nifty 50 to reach 26,600 level at 2025 end; It is among top sectors that can create wealth: Achin Goel, Bonanza Group | Einsmark news

Expert view: Achin Goel, PMS fund manager at Bonanza Group, believes that Nifty 50 can reach at 26,600 level by the end of 2025, aided by 11% growth in the Nifty-50 compositative enterprises. Furthermore, he expects the FII to remain positive in the Indian stock market, as India’s fixed economic growth and continuous reforms will mitigate geopolitical risks and maintain strong foreign investor interest. Edited excerpts: India’s macro -economic picture looks pretty strong. How would you read its impact on the Indian stock market? India’s strong macro economic fundamentals act as a powerful windwind for the stock markets. We see a combination of high GDP growth, strong tax collections, manageable inflation and consistent state capital expenditure – all of which are a good basis for sustainable growth in earnings. From an investor’s perspective, build this kind of macro stability trust. For example, a disciplined fiscal approach and the measured monetary policy of RBI help keep inflation and interest rate volatility in check, which is of utmost importance to long -term flow, especially from institutional investors. In addition, the government’s emphasis on infrastructure, manufacturing by PLI schemes and digital public infrastructure is accelerating a multi-sector capex cycle. It benefits sectors such as capital goods, construction, banking and industries. In addition, India’s demographic dividend and rising middle class support domestic consumption, which strengthens sectors such as FMCG, Autos and Retail. Simply put, strong macros not only support the market – it helps to broaden the rally and to deepen sectoral participation, which makes India one of the attractive investment destinations under emerging markets. The Smallcap index has seen an excellent run, which is the Nifty 50 factual. What is behind this trend and is it a call for caution in the midst of merit? The recent star run of the Smallcap index, which performed better than the Nifty 50 and large caps with profits such as 6.87% in May 2025 and double-digit returns for many stocks, is powered by strong growth potential and renewed investor interests in sectors such as railways, defense and finance. Smallcaps benefit from their higher growth prospects and are seen as attractive to medium-to-long-term investors who are willing to tolerate a higher risk. However, this rally comes in the midst of important challenges: Q4FY25 smallcap profits contracted with 19%, in contrast to Midcap and Largecap earnings growth. Earnings downgrades, slowdowns of government hapex and sector-specific weaknesses-especially in cement, private banks, consumer and car sectors-have expressed concern about sustainability. Thus, although smallcaps offer compelling upside due to valuation -discount and sectoral overhauls, earnings are missed and macro uncertainties are fair. Investors should balance the growth potential against increased volatility and selectivity risks amid an unequal earnings background. The former poster boy from Dalal Street – It Pack – was on the back foot. Do you see these shares that make a comeback? The prospects for the Indian IT sector in FY26 appear to be challenging, mainly due to the impact of cutting the discretionary expenses in the US amid rising recessive pressure. The US, which accounts for more than half of India’s US $ 190 billion in software exports, is experiencing a cautious consumer sentiment with many consumers planning to reduce spending on discretionary items. This caution is exacerbated by rates imposed by the US administration, which fueled inflation and increased the fear of a recession. Rates, which are not directly aimed at IT services, but indirectly affect Indian IT businesses as their clients face higher costs and uncertainty in manufacturing, logistics and retail sectors, leading to delayed projects and slower cycles. As a result, the current scenario is characterized by limited new outsourcing opportunities and pressure on the margin due to prices and limited benefits for the depreciation of rupees. However, Indian IT businesses specializing in AI, Gen AI and Cloud Services are ready for robust growth, powered by rapid digital transformation and increasing acceptance of AI-A-A-A-service and hybrid cloud models. US businesses, which face recessionary pressure, reinforce the efforts to promote cost optimization by prioritizing scalable, efficient cloud solutions and AI deployments that reduce operating expenses while increasing productivity. This focus on cost-effectiveness affects Indian IT firms to offer optimized cloud and AI services that match the US customers’ budget-conscious strategies. Defense and railroad shares are on the flight again. Is valuation a concern or do you see the trend sustained? Defense and railroad shares have recently shown a significant upward movement, fueled by strong government initiatives and strategic sectoral developments. Defense shares indicate a possible turnaround to previous corrections, supported by India’s aggressive pressure on indigenous and export growth. Operation Sindoor also significantly increased the shares of investor interest defense, as some of the shares rise to 35% shortly after the conflict begins. The boom reflects the expectations of increased spending on defense, supplementation of military stock and export opportunities powered by India showed indigenous military power and technological advantage. Meanwhile, railroad shares also conspired strongly on the back of a significant Capeex push, with the award of the Government’s budget of Rs.2.62 Lakh -Crore for spending railway capital in 2025–26, which focused on infrastructure upgrades and electrification projects. Given the continued government’s focus on modernization, ‘Make in India’ initiatives and technological adoption in both sectors, the upward trend seems to continue in the medium term, provided macro economic stability and policy continuity remain intact. Promoters loaded around £ 43,000 shares of current markets shares. Do you see it as a red flag? The £ 43,400 Crore -Promotor selling in May justifies carefully interpretation rather than a direct alarm. While the timing coincides with Nifty’s 12%surge, it seems to be driven by liquidity dynamics rather than fundamental problems. With FIIs and DIIs injecting Rs.80,000 crore, promoters are naturally offering to cater through block offers, as individual retail investors cannot facilitate large institutional purchases. However, the dichotomy between companies that lead strong growth, while promoters shower shares at high valuations, raises questions about insider sentiment. Withdrawals from large cap such as Interglobe (£ 11,560 crore) and ITC bat (£ 12,900 crore) may indicate the rebalancing of the portfolio, while the sale of small and Midcap promoter can be seen and can justify a deeper analysis. While not strictly a red warning, this pattern indicates that bulls should be greater caution, given the current values. Many brokers raised targets for Nifty 50. How do you see the index and target? Many leading brokers recently upgraded their Nifty 50 target for the year 2025, reflecting a positive prospects based on fundamental analysis. This optimism is powered by strong growth in corporate earnings, robust economic indicators and favorable monetary policy with a rate of 50 BPS through the RBI. FIIs have also turned net buyers amid a weakened dollar index and volatile US bond returns, further supporting the market sentiment. On the above thesis, we also expect ~ 11% EPS growth in the NIFTY-50 composition businesses in FY26 to ~ Rs.1,300. Based on this, we expect Nifty-50 to be at 26,600 level, a further 6.5% increase by the end of 2025. FPI purchase was quite strong and supportive of the market. What makes them bullish on India and for how long? Foreign investors showed renewed confidence in Indian markets, which pumped £ 4,223 crore in April, followed by a record of £ 19,860 in May 2025, which was the strongest inflow this year. This enthusiasm comes from a mix of positive factors: India’s GDP growth has all been surprised by a strong 7.4% in the last quarter, the weakening of the US dollar has made Indian assets more attractive and a conversation from a possible US Indian trading agreement has increased long-term optimism. In addition, policy changes such as alleviating investment rules for Saudi Arabia’s Sovereign Fund shows India’s commitment to welcoming foreign capital. While the uncertainties in the short term, such as geopolitical risks and rising US Treasury yields, can reverse this tendency. However, India’s fixed economic growth and continued reforms will reduce these risks and hold strong importance in foreign investors in the coming months. What are the top sectors that can create wealth for investors? Technology and IT services are the best sectors for wealth creation, driven by digital transformation and AI adoption. Renewable energy and electric vehicles benefit from strong global sustainability trends and supporting policies. The pharmaceutical and healthcare sector offers constant growth due to innovation and export opportunities. Infrastructure development is powered by urbanization and government projects. Financial services and fintech grow through digital inclusion and financial floor. Finally, consumer goods thrive on rising middle -class consumption and rural market invasion. Diversification of these sectors can help investors build and preserve wealth. The fall in the US dollar: What could its impact be on India? From the beginning of June 2025, the Indian rupee is stable and trades between £ 85.80 and £ 86 against the US dollar. It strengthened slightly with 7 paise, aided by foreign money entering the country and a gentle approach through the RBI. The RBI surprised everyone by reducing the Repo rate by 0.5% to 5.5% – it is the largest reduced in five years. This also reduced the CRR by 1%. This shows that the RBI is confident because inflation in India dropped to about 3.16% in May, which is low and manageable. A weaker US dollar, lower inflation in India and cheaper oil prices has reduced India’s import costs. It helps the economy as India imports a lot of oil and goods into dollars. Exporters, especially in it and Pharma, can benefit as their products become more competitive worldwide. However, their earnings in dollars may be worth less in rupees. Coming US work data can also affect how strong or weak the dollar remains and affects the investment in countries such as India. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or brokerage companies, and not of currency. We advise investors to check with certified experts before making investment decisions.