Recent high-frequency economic data highlights persistent macroeconomic challenges in India, including slow growth, fluctuations in GST collections. automobile According to InCred, sales and currency volatility. These factors have contributed to cautious market sentiment, with the Nifty 50 index likely to remain in a consolidation phase due to longer-term risks to GDP and EPS growth.
macroeconomic overview
InCred notes that for FY25, Bloomberg’s consensus estimate is realistic GDP growth The decline continued citing excessive capital expenditure, rising trade deficit and declining trend in GST collections. GST collections grew only 7.3 per cent year-on-year in December 2024 and 9.1 per cent during the first nine months of FY2025.
Looking to FY26, InCred highlighted emerging global uncertainties, including slower trade growth and a stronger US dollar, which have put pressure on emerging market currencies. The Indian rupee depreciated by 0.7 percent in December 2024 and witnessed a sharp decline in the last days of the month.
InCred hopes us dollar This will be further strengthened, driven by strong economic growth in the US and the impending presidency of Donald Trump. This could accelerate the Indian rupee’s depreciation in the March 2025 quarter, exceeding the 1.4 per cent depreciation recorded during the first nine months of FY2025.
Despite these challenges, InCred remains optimistic about the IT and pharmaceutical sectors, which are well-positioned to benefit from the strong US dollar. Although much depends on the Union Budget in February 2025, InCred expects these macroeconomic challenges to be addressed through measures such as income tax cuts to boost consumption and increased government capital expenditure.
High-Conviction Stock Ideas
InCred provides an updated view of its high-credence stock ideas Deepak Fertilizers while deleting (add) Exide Industries (reduce) and BCL Industries (Add) to its list.
Add: Deepak Fertilizers and Petrochemicals Corporation (ADD) has been added to the list, with InCred citing cost benefits from ammonia expansion and a favorable gas contract as key drivers of profitability.
delete: Exide Industries was removed after the stock improved in line with InCred’s target price expectations. BCL Industries was also removed after review of its plans to enter the biogas sector.
Recent performance since September 2022
outperforming nifty, captain (Add), Aditya Birla Sun Life AMC (add), and Bharat Forge (Add).
Underperformer for Nifty, Hero MotoCorp (ADD), Exide Industries (REDUCE), and Pidilite Industries (Add).
Top absolute returns in recent months, hip (add) and Bajaj Finance (Add).
Technology trend-oriented selection
InCred identified Hero MotoCorp, Lupine, Maruti Suzuki and Bajaj Finance as stocks with favorable technical trends, all rated as ADD.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before taking any investment decision.
