HSBC cut its rating on Indian equities to "neutral" on Thursday, joining a growing list of global brokerages that have tempered their bets on Asia's third-largest economy on slowing growth and elevated valuations.

HSBC has downgraded its India outlook from 'overweight' to 'neutral,' with a BSE Sensex target of ₹85,990 for 2025. The move is mainly prompted by worries over falling corporate profits and elevated market valuations.

HSBC has downgraded Indian equity stocks to "neutral" from "overweight" on December 9. "The cyclical growth slowdown and elevated valuations have capped the upside in the near term... (and) we see muted market returns in 2025," HSBC said in its note.

The Indian economy is facing slow economic growth and HSBC Global Research has downgraded the Indian stock market outlook from "overweight" to "neutral".The global financial services firm in a report said profits at India Inc have softened while valuations are evaluated.