According to brokerage Geojit Financial Services, the outlook for 2025 signals promising opportunities for sectors such as chemicals, defense, infrastructure, and renewable energy amid strong domestic demand and supportive government policies.
1. Chemicals
India’s chemical industry is set to witness a revival, driven by domestic demand and the “China+1” strategy. After challenges like muted demand and pricing volatility in FY24, H2FY25 is expected to bring strong growth in revenue and profitability.
Geojit’s top stock picks for 2025 in this sector include PI Industries, Vinati Organics, Aarti Industries, and UPL, which are well-positioned to benefit from global production diversification and value-added manufacturing.
2. Defense
India’s defense sector is thriving, fueled by increased capital expenditure and initiatives like the ban on over 3,000 imports. The modernization drive has significantly improved the order pipeline and execution capabilities of domestic companies.
Geojit’s top stock picks for 2025 in this space, including Bharat Electronics, Astra Microwave Products, Cochin Shipyard, and Hindustan Aeronautics, are expected to deliver strong returns.
3. Electronic Manufacturing Services (EMS)
The EMS sector is projected to grow at a remarkable 27% CAGR through FY27, with strong support from initiatives like the PLI scheme. India’s push toward import substitution and increased domestic production offers significant growth opportunities.
Recommended stocks for this sector include Kaynes Tech, Dixon Tech, Amber Enterprises, and PG Electroplast.
4. FMCG
After a challenging FY24 marked by food inflation and sluggish urban demand, the FMCG sector is positioned for recovery in H2FY25. Bumper agricultural output and rising government expenditure will boost demand and profitability.
Top stock recommendations include Hindustan Unilever (HUL), Jyothy Labs, and Tata Consumer Products, which are expected to benefit from premiumization and improved market conditions.
5. Infrastructure
India’s infrastructure sector is poised for significant growth as government spending ramps up to meet ambitious budget targets. The back-ended spending in FY25 is expected to drive GDP growth and corporate earnings.
Recommended stocks in this space include NCC, Larsen & Toubro (L&T), KEC International, and HG Infra.
6. Renewable Energy
India’s renewable energy sector is set to expand rapidly, with capacity projected to grow at a 19.6% CAGR through FY29. Supported by government initiatives such as the PLI schemes and offshore wind projects, the sector offers attractive opportunities.
Top stock picks include Suzlon Energy, Tata Power, Torrent Power, Waaree Energies, Premier Energies and NTPC Green Energy.
7. Textiles
India’s textile sector is capitalizing on the declining dominance of China in global markets, supported by stable cotton prices and growing export demand. With government incentives through the PLI scheme, companies in this sector are poised for growth.
Recommended stocks include Welspun Living, Vardhman Textiles, Arvind and Trident.