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InCred bets on Camlin, midcap banks; Exits Adani Ports, Cipla amid tepid earnings outlook

InCred Equities has turned selective on Indian equities, adding Camlin Fine Sciences and mid-sized banks to its high-conviction list while dropping Adani Ports and Cipla. The brokerage's reshuffle comes amid slowing earnings momentum, even as broader markets rally on improving macroeconomic signals. ADVERTISEMENT Despite tailwinds from a forecast of above-normal monsoon rains, easing oil prices and a sharper-than-expected rate cut by the Reserve Bank of India, InCred flagged a widening gap between macro hopes and actual earnings performance. For the March 2025 quarter, Nifty-50 companies posted just 5% year-on-year growth in profit after tax, with earnings falling short of Bloomberg consensus by 1%. 'EBITDA growth, ex-BFSI sector, was healthy at 20% yoy, driven by retail, telecom and capital goods sectors,' the brokerage said, but noted continued declines in the cement sector and subdued results across automobiles, FMCG, IT, and power. This has led to a 2% cut in the FY26 consensus EPS forecast for the Nifty-50. Camlin Fine Sciences was added with an 'Add' rating, with InCred citing 'stabilization of its vanillin plant and the imposition of antidumping duties on vanillin in the U.S.' as key triggers for a stronger profit outlook. Mid-sized banks were given an 'Overweight' rating, with the brokerage expecting improved liquidity to reduce funding the same time, InCred removed Adani Ports from its list, saying 'we book profit as its market price is now close to our target price,' and dropped Cipla from the list due to 'near-term margin pressure stemming from its product mix.'Technical indicators continue to support UPL, Skipper, and Petronet LNG, which remain on the radar as momentum plays, the brokerage said. ADVERTISEMENT The brokerage raised its bull-case probability to 35% from 25% earlier and increased its Nifty50 March 2026 target to 25,142, just a 1% upside from current levels. 'The sustained rise in Nifty-50 index in the last three months has lifted forward P/E valuation to a 10-year mean level,' InCred noted, cautioning that most macro positives may already be priced in. While telecom, FMCG, utilities and commodity stocks saw earnings upgrades, the brokerage highlighted cuts across IT, consumer discretionary, industrials, and BFSI sectors. Major double-digit EPS upgrades in the broader Nifty200 universe were seen in SAIL, Power Finance Corporation, InterGlobe Aviation (IndiGo), Mahindra & Mahindra, and BPCL. InCred concluded that 'macro hopes yet to reflect in earnings,' reinforcing the need for a stock-specific approach as headline indices near valuation ceilings. ADVERTISEMENT Also read | ONGC, Oil India shares gain up to 3% as Israel-Iran conflict drives crude higher; drag on refiners, tyre makers (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)