Nifty to gain just 2% by FY26 to hit 22,850? This brokerage thinks so

Skipper, Aditya Birla Sunlife AMC, and Bharat Forge are InCred Equities' high-conviction stocks that outperformed Nifty 50 since September 2022.

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26 Aug, 2025 12:21

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The Indian frontline index Nifty 50 is seeing high volatility as a result of global uncertainties, unabated capital outflows, and rich valuations. Given the local and global macroeconomic challenges in the short term, domestic brokerage InCred Equities cut its target on Nifty 50 to 22,850, an upside of 2 percent, by the end of March 2026.

The bull-case scenario could see Nifty 50 at 26,123, higher by around 15 percent, while in the bear-case scenario, the brokerage foresees an eight percent downside from current levels to 21,029. However, InCred Equities cut its bull-case probability to 5 percent, from 10 percent earlier, and raised the bear-case probability to 45 percent, from 40 percent.

The acceleration of consensus EPS cuts on index stocks raises credibility on early-teen growth projections for FY26F-27F, reasoned the brokerage.  "The high volatility in the index will continue due to global policy actions and India’s rich valuation comparative to Asia (+1 Standard Deviation above the 10-year mean)," noted InCred.

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Taking advantage of the broad-based correction, which makes large-caps more attractive, InCred Equities introduced more large-cap names in its high-conviction stocks list and certain mid-caps where the profit outlook has improved.

Since the start of the series in September 2022, Skipper, Aditya Birla Sunlife AMC, and Bharat Forge have outperformed the Nifty 50, while Deepak Fertilisers and Petrochemicals, Hero MotoCorp and Pidilite Industries have underperformed.

The brokerage added these stocks to its high-conviction stocks list:

• Adani Ports and Special Economic Zone – There is visibility on volume growth, and the stock trades at an attractive valuation after a 23 percent decline in its price in the last six months.
• Bajaj Auto – The company has consistently demonstrated EBITDA margin neutrality from electric vehicle or EV transition, despite EVs rising in its domestic product mix from 3 percent in 2QFY24 to almost 12 percent currently, which is impressive.
• Ethos – Management strategy shift to focus on super premium watches to drive its EBITDA margin and profitability.
• Marico – Among the first to make efforts to alleviate inter-channel conflicts due to aggressive scale-up of quick commerce and make steady progress towards its slated diversification agenda, with a strong focus on the foods segment.
• Shriram Finance – Diversified AUM mix (rising non-vehicle loans) and improved underwriting/collection provide asset quality comfort.

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