Incred Equities lowers Nifty 50 target by 3% to 25,327 for March 2025; Bajaj Finance, Hero MotoCorp and HDFC Bank among 23 stocks to buy

InCred Equities in light of the recent correction on the Nifty50 index and thus valuations easing to below the 10-year mean level of 20x one-year forward P/E has reduced the Nifty50 target for the second half. This is as even though Index valuation eases from its peak, but earnings stability and outlook are keenly awaited, said the brokerage in its India Strategy report dated November 26.

2Q results miss leading to a cut in Nifty-50 Bloomberg consensus estimate to a lower-teen CAGR for FY25F-26F is getting captured by the recent index correction, added the report.

The report also highlighted that since the peak hit in September this year, Nifty 50 has slumped a sharp 8 per cent, where mid-caps and small-caps also underperformed. The major beat was from information technology or IT, capital goods and pharmaceutical sectors. 

Nifty50 outlook

The high volatility in the index will continue due to global volatility and India’s rich valuation compared to Asia (+1SD above the 10-year mean). With major state elections behind, hopefully government policy action should fall in place to reach budgeted spending and meet consensus expectations on GDP growth and inflation curtailment. With local and global macroeconomic challenges in the short term, the brokerage has hence cut its bull-case probability to 10 per cent  (from 20 per cent earlier) and raised the bear-case probability to 35 per cent

With around 4 per cent Nifty-50 Bloomberg consensus EPS cut seen in recent weeks, the brokerage has  cut its blended Nity-50 target by 3 per cent to 25,327, an upside of 4 per cent by the end of Mar 2025F.

At the last count in Wednesday's trade (November 27), the Nifty50 index traded at 24,286.55, up 92 points or 0.38 per cent.

Pharma sector upgraded to 'overweight'

The brokerage has upgraded the defensive sector to 'overweight' by upgrading Cipla, Ipca Laboratories and Alkem Laboratories.

23 stocks across m-caps in InCred's high-conviction stock ideas list

The brokerage is bullish on counters including Bajaj Finance, HDFC Bank, Tata Steel, SBI, SBI Card, Skipper, Adani Birla SunLife AMC, BCL Industries, Cipla, Clean Science and Tech, Container Corporation of India, Cyient DLM, Exide Industries, Global Spirits, Hero MotoCorp, Indigo, Lupin, Maruti Suzuki, Petronet LNG, Pidilite Industries, TCPL Packaging and TCS.