Dark horse sectors key in New Year, equities may return 8-12%: ABSL MF

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Mumbai: Aditya Birla Sun Life Mutual Fund said equities could return 8-12% in 2025. The fund house said investors should focus on "dark horse" sectors like private banks, energy proxies, cement, and metals, while real estate, defence and PSU stocks are "sell-on-rise" opportunities.

"There has been a significant amount of liquidity driving markets, but ultimately we all know that earnings drive markets or earnings drive stock prices. When we look at that disconnect today, it seems very stark that many, many companies have got significantly outbid," said Harish Krishnan, co-CIO and head of equity at Aditya Birla Sun Life AMC in press meet.

Krishnan said the market needs to get into a phase of consolidation. "Therefore, we think that 2025 is going to be that year of consolidation wherein fewer sectors, fewer stocks are likely to outperform," he said.

Aditya Birla Sun Life said the key short-term risks include growth falling below expectations-especially as markets have priced in a soft landing-and fewer or slower-than-expected rate cuts, which could trigger a deflationary impact on asset prices. The asset manager said India's positioning in FPI portfolios is down to the lowest in more than a decade.

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