Crude Price Must Cool to $70-$75 for Nifty 50 to Sustain Above 25,000, Says Kotak Securities Analyst

Market Expert Predicts Nifty to Potentially Cross 25,000

Shrikant Chouhan, the head of equity research at Kotak Securities, has expressed his views on the current market scenario. According to Chouhan, the worst phase of the market may be behind, but elevated crude oil prices remain a key challenge. While the market has already seen its worst phase, with the Nifty trading at nearly 16-16.5 times FY28 earnings, Chouhan believes that the market can potentially move towards 25,000 and may even cross that level.

Conditions for Sustained Rally

For the rally to sustain beyond 25,000 and extend further, crude prices need to cool off to around $70-75 per barrel. If this does not happen, the market may witness a range-bound movement going forward. Chouhan emphasized that large-cap companies are better positioned to withstand volatility and offer stronger stability for long-term investors.

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Medium-Term Investment Strategy

Chouhan recommends a buy-on-dips approach with a long-term perspective. In the near term, there is still limited clarity on how quickly crude prices may cool down to the $70-75 range. If the war continues for an extended period, elevated crude prices could weigh on sentiment and create pressure in the near to medium term, which may lead to market weakness.

Growth Segments

The focus should remain on sectors such as BFSI, capital goods and engineering, power equipment, and power generation companies, which are relatively better placed to act as defensive growth plays during periods of uncertainty. These sectors offer a better balance of stability, earnings visibility, and long-term growth prospects.

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IT Sector Performance

The IT sector in FY26 has been shaped by a mix of structural and near-term challenges. Growth faced multiple headwinds, including the rapid emergence of AI, geopolitical uncertainties, and increased insourcing by a few large clients. However, developed markets are showing signs of recovery, and deal activity has remained strong.

Bank Nifty and Mid-Caps

The Bank Nifty has already witnessed a strong rally from lower levels, moving from around 50,000 to nearly 57,000 currently. From a technical perspective, the index still has the potential to move towards the 60,000 mark in the near term. However, sustaining above 60,000 and scaling a fresh all-time high would likely require strong positive triggers.

Conclusion

Chouhan's expert view suggests that while the market has already seen its worst phase, elevated crude oil prices remain a key challenge. Investors should adopt a buy-on-dips approach with a long-term perspective and focus on large-cap companies, BFSI, capital goods and engineering, power equipment, and power generation companies. The IT sector is expected to recover, and the Bank Nifty may reach 60,000 in the near term. Mid and small-cap stocks should be approached with caution and selective buying in fundamentally strong companies with sound balance sheets and earnings visibility.