Nifty may hit 25,500 in two quarters, says ICICI Securities; suggests buying quality stocks on dips

Equity markets have rebounded strongly after defending the March lows of 21,900, with ICICI Securities attributing the move to easing global concerns such as the 90-day pause on US tariffs. The firm believes the worst may be over and expects the Nifty to gradually climb towards 25,500 over the next two quarters.

According to ICICI Securities’ statistical model, most of the negative news flow appears to be priced in, with the index likely forming a strong base in the 21,900–23,800 range. This consolidation phase, supported by positive divergence on the weekly charts, suggests the bottom is in place and the stage is set for an eventual up move.

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Looking at historical patterns, the firm noted that since 2002, corrections in a structural bull market have typically been capped at 18% in terms of price and lasted about 8–9 months in terms of time. The recent 17% decline over seven months is seen as nearing maturity in both dimensions.”Such corrections often end with a U-shaped base formation rather than a sharp V-shaped recovery,” ICICI Securities said, adding that improving market breadth, sentiment indicators, and momentum trends point to a sustainable turnaround.

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On a broader scale, global macro indicators are turning supportive. A breakdown in the US Dollar Index, declining Brent crude prices, and cooling volatility in the S&P 500 (VIX) signal a more favourable backdrop for emerging markets, including India.

The firm also highlighted that midcaps, having historically undergone 27% corrections in bull markets, now offer strong risk-reward potential with average returns of 28% in the following six months.

From a sectoral perspective, ICICI Securities remains bullish on domestic themes, particularly Financials, PSUs, Metals, Telecom, Pharma, and Consumption. It also sees opportunities in IT, Capital Goods, and Infrastructure due to attractive valuations.

“Dips should be capitalized to accumulate quality stocks,” it said, suggesting a medium-term portfolio building strategy.

Also Read: Bajaj Finance, IndiGo among 10 largecap stocks where FIIs raised stake in Q4

Sector-wise Top Picks:

BFSI: SBI, HDFC Bank, Kotak Bank, Bank of Baroda, Bajaj Finance, Chola Finance, HDFC AMC, SBI Cards

PSUs: HAL, BEL, BDL, Engineers India, Bank of India, PFC, GIPCL, SAIL

Capital Goods: L&T, ABB, KEC, Timken, Vatech Wabag, BEML, ACE, Astra Microwave, Voltamp, Techno Electric

Oil & Gas/Energy: Reliance Industries, HPCL, NTPC, Tata Power, JSW Energy, CG Power, Coal India

Auto: M&M, Tata Motors, Eicher Motors, Apollo Tyres, Exide Industries, Minda Corp

IT: TCS, Tech Mahindra, LTI Mindtree, Persistent Systems, Newgen Software

Consumption/Retail: Titan, Indian Hotels, Amber, United Spirits, Havells India, V-Guard, Tata Consumer, Marico India

Pharma/Chemicals: Sun Pharma, Ajanta Pharma, Divi’s Labs, Piramal Pharma, Syngene, Apollo Hospital, Navin Fluorine, SRF, Coromandel Fertilizers, Deepak Fertilisers

Real Estate: DLF, Godrej Properties, Prestige, Max Estate, Century Plyboards, Kajaria Ceramics

Infra/Metals: Ultratech Cement, JK Lakshmi, Ramco Cement, Dalmia Bharat, Adani Ports, KNR Construction, JSW Infra, NCC, JSW Steel, Tata Steel, Hindalco, HEG

Others: Bharti Airtel, KPR Mills, VTL, Lemon Tree Hotels, Chalet Hotels, Aeroflex, PCBL, PNB Housing, IRCON, HIKAL, Syrma

Also Read: 10 Nifty 500 stocks that can soar 75-155% in the next 12 months

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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