India's equity markets witnessed a major rally in Q1 2025, with Bajaj Finance emerging as the biggest gainer among NSE500 companies. The non-banking financial company's market capitalization surged by ₹1.3 lakh crore, taking its valuation to a record ₹5.6 lakh crore, marking an impressive 32% increase in just three months.

Bajaj Finance's Market Rally: A Strong Comeback

The latest surge in Bajaj Finance stock follows a challenging December quarter, where it saw an 11.4% decline. However, the company's performance has rebounded sharply, driven by positive investor sentiment, easing credit costs, and a favorable interest rate environment.

Adding to the stock's momentum was the announcement of Rajeev Jain's elevation as Vice Chairman for three years. Jain, who has been instrumental in Bajaj Finance's growth, has removed speculation over leadership continuity, reinforcing investor confidence.

Strong Performance by Reliance Industries and Bharti Airtel

Apart from Bajaj Finance, Reliance Industries (RIL) and Bharti Airtel also recorded significant market cap gains. RIL added ₹90,000 crore to its valuation, while Bharti Airtel followed with similar gains, reflecting renewed market optimism.

Despite their recent uptrend, both companies experienced declines in the December quarter, with Reliance falling by 18% and Bharti Airtel by 7%. However, analysts believe that the worst may be over, and their stocks are positioned for further upside.

CLSA and Morgan Stanley Remain Bullish on Bajaj Finance

According to CLSA's top chartist Laurence Balanco, Bajaj Finance is experiencing a multi-year breakout trend, which could propel the stock to new highs. Balanco told CNBC-TV18, "I expect a major multi-year trading range breakout in Bajaj Finance."

Morgan Stanley has included Bajaj Finance in its Asia Pacific Ex-Japan and Global Emerging Markets focus list, citing strong fundamentals, lower credit costs, and easing regulatory risks as key drivers for future growth.

Goldman Sachs Raises Target for Reliance Industries

Meanwhile, Goldman Sachs has raised its 12-month target price for Reliance Industries to ₹1,640, implying a 28% upside from current levels. The brokerage expects:

• Retail segment growth of 6.5% YoY in Q1 2025, a recovery from the previous quarters.

• Stable EBITDA for the March quarter, with focus shifting to retail and Jio's performance.

Market Outlook: Further Gains Expected

With NBFCs, telecom, and diversified conglomerates leading the rally, market analysts expect further upside in these stocks. The interest rate cycle, management stability, and macroeconomic recovery will play a key role in sustaining the momentum.

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