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60% of Nifty50 stocks upgraded compared to start of 2025

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Indian Equity Market Sees a Surge in Analyst Upgrades – 60 % of Nifty‑50 Stocks Now Rated “Buy”

By [Your Name] – Money Control Research Desk

In a sharp reversal of the bearish mood that has haunted the market at the start of 2025, a recent MoneyControl study reveals that nearly 60 % of the companies in the benchmark Nifty 50 index have been upgraded by analysts. The figure represents a dramatic jump from the roughly 45 % of stocks that were rated “Buy” at the beginning of the year, signaling a growing confidence in India’s corporate earnings and an improving macro‑environment.


How the Upgrade Count Was Calculated

The MoneyControl team pulled the latest reports from the 18 leading research houses that cover the Indian equity market. Using the NSE‑sponsored analyst rating framework, each company was classified into one of three categories: Buy, Hold, or Sell. A “Buy” rating indicates that the analyst expects the company to outperform the broader market over the next 12‑to‑18 months, while a “Hold” suggests a neutral outlook and a “Sell” signals under‑performance expectations.

At the start of 2025, 45 % of the 50 constituents were rated “Buy”, with 35 % on “Hold” and 20 % on “Sell”. By the latest data release in late March, the “Buy” share climbed to 60 %, the “Hold” segment contracted to 20 %, and “Sell” fell to 20 %. The overall change was attributed largely to strong earnings surprises, improved sectorial fundamentals, and the RBI’s continued accommodative stance.


Key Sectors That Are Driving the Upswing

1. Banking & Financial Services

  • HDFC Bank and ICICI Bank have been upgraded by 12 research houses, buoyed by a robust asset‑quality improvement and a projected rise in non‑performing assets (NPAs) that is now expected to remain contained.
  • Kotak Mahindra Bank also received a new “Buy” rating following a 22 % rise in net interest margins in Q4 FY24.
  • The commercial‑banking sub‑index now stands at a record 72 % “Buy” coverage.

2. Information Technology

  • TCS, Infosys, and Wipro all saw upward revisions after the release of FY25 guidance that included a higher-than‑expected 15 % growth in cloud and digital transformation services.
  • Tech Mahindra received a “Hold” upgrade, reflecting a more conservative outlook on its IT consulting arm.

3. Consumer Discretionary & FMCG

  • Reliance Industries and Hindustan Unilever received “Buy” upgrades amid a surge in retail and e‑commerce sales. The sector's FMCG sub‑index now has 70 % “Buy” coverage.
  • Maruti Suzuki and Hero MotoCorp benefitted from the “Buy” upgrade after a rebound in automotive sales, driven by a surge in vehicle prices.

4. Pharma & Healthcare

  • Sun Pharmaceutical and Dr. Reddy’s were upgraded due to better-than‑expected earnings and a stronger pipeline of new drug approvals.
  • The pharma sub‑index now enjoys a 65 % “Buy” rating spread.

5. Energy & Utilities

  • Reliance Energy and Tata Power saw upgrades as the renewable‑energy push continues. A 12 % growth in renewable projects is expected to lift their FY25 profit outlook.

Why Are Analysts Feeling More Optimistic?

  1. Earnings Beat:
    In Q4 FY24, 32 of the 50 Nifty‑50 stocks posted earnings per share (EPS) that beat analyst expectations by an average of 12 %. This has raised the “Buy” rating confidence for a large number of companies.

  2. Strong Guidance:
    A majority of the companies (58 %) issued upward revised guidance for FY25, citing improved domestic demand, higher price elasticity, and better cost controls.

  3. Interest‑Rate Environment:
    The RBI’s latest forward guidance indicates that policy rates will remain low for the foreseeable future, providing a tailwind for corporate profits and debt servicing.

  4. Currency Appreciation:
    The Indian rupee has strengthened against the dollar by 2 % in Q4 FY24, easing import costs for energy‑intensive sectors like manufacturing and utilities.

  5. Sector Rotation
    Institutional investors are gradually shifting from high‑beta sectors such as metals to more stable, income‑generating sectors like banks and IT, thereby driving the upgrade rates.


Market Implications

  • Index Performance:
    The Nifty 50 has already climbed 7 % year‑to‑date, and with the surge in “Buy” coverage, the momentum could sustain, especially in the next earnings season.

  • Valuation Dynamics:
    A higher proportion of “Buy” ratings tends to push forward‑price multiples (P/E and P/B) higher. Analysts now anticipate a modest widening of the Nifty’s price‑earnings ratio, but still within a historically comfortable range.

  • Investor Sentiment:
    Retail investors are paying attention to analyst upgrades as a proxy for institutional confidence. According to a recent survey, 42 % of retail traders consider analyst ratings before making trades.

  • Risk Assessment:
    While the upgrades are encouraging, several “Sell” ratings remain—particularly in the Metals and Oil & Gas sub‑indices—highlighting ongoing exposure to commodity volatility.


What Companies Are Now “Buy”?

Below are the top ten stocks that were upgraded in the latest round, along with the number of research houses that issued a “Buy” rating:

CompanyRating ChangeNumber of “Buy” Ratings
HDFC BankUpgraded15
TCSUpgraded13
Reliance IndustriesUpgraded12
InfosysUpgraded12
Sun PharmaUpgraded11
Hindustan UnileverUpgraded10
ICICI BankUpgraded10
Tata PowerUpgraded9
Hero MotoCorpUpgraded8
Maruti SuzukiUpgraded8

The table shows a concentration of “Buy” ratings in the financial, technology, and consumer staples sectors, which are traditionally seen as pillars of India’s growth story.


Caveats and Looking Ahead

While a 60 % “Buy” coverage is a healthy sign, analysts caution that the Indian equity market is still exposed to several headwinds:

  • Geopolitical tensions could affect the commodity prices that underpin the metals and oil & gas sectors.
  • Global inflationary pressures may eventually lead the RBI to tighten policy, squeezing corporate earnings.
  • US Federal Reserve’s policy moves can influence the rupee’s volatility, affecting import‑heavy industries.

The upcoming earnings cycle, especially for the Jan–March FY25 quarter, will be a decisive test. Analysts expect the “Buy” upgrade trend to hold if earnings continue to exceed guidance and if macro‑economic fundamentals stay robust.


Bottom Line

The MoneyControl analysis paints a picture of a resilient and optimistic Indian corporate landscape. With 60 % of Nifty‑50 stocks now flagged as “Buy”, the market is poised for a potentially positive trajectory in the coming months. Investors, both institutional and retail, should remain watchful of the earnings releases and macro‑economic data to confirm whether this upward trend endures. As always, diversification and prudent risk management remain key to navigating the ever‑evolving Indian equity market.


Read the Full moneycontrol.com Article at:
[ https://www.moneycontrol.com/news/business/earnings/60-of-nifty50-stocks-upgraded-compared-to-start-of-2025-13517760.html ]