InCred rejigs India strategy for Feb 26; what's new in high-conviction list

Reviewing the performance of its high-conviction ideas, InCred said Tata Motors Commercial Vehicles, GE Vernova T&D and Thyrocare Technologies have been "big outperformers to Nifty"

Brokerage firm InCred Equities has recalibrated its India strategy for February 2026, reiterating a positive stance on select cyclical and domestic growth-oriented sectors while making changes to its high-conviction stock list. The firm continues to maintain an overweight position on automobile original equipment manufacturers (OEMs), auto components, agribusiness, cement, defence, financial services, metals and mining, and power transmission and distribution, according to its February 2026 India Strategy report.

 

InCred remains neutral on consumer staples, infrastructure, information technology (IT), oil and gas, and pharmaceuticals, while continuing to stay underweight on aviation, building materials, ports and logistics, and chemicals. The brokerage said recent high-decibel policy actions have helped improve confidence, noting that the Union Budget 2026–27 reiterates that the fiscal consolidation trend will continue.

 

 

“Union Budget 2026–27 reiterates that the fiscal consolidation trend will prolong. Budget policies decisively shift the focus to improving manufacturing capability and productivity in critical sectors on a medium-term basis—biopharma, capital goods, chemicals, electronics, rare earths, semiconductors and textiles—to integrate into global value chains,” wrote Pramod Amthe and Ravi Gupta of InCred in India Strategy note. 

 

They also pointed to capacity and capability building in services such as hospitals and tourism as medium-term growth drivers.

 

The recent improvement in credit growth, aided by a pickup in private capital expenditure, is seen as a positive. “The recent India–EU Free Trade Agreement (FTA), followed by the reduction in US tariffs on India, will benefit sectors such as chemicals, textiles and electronics,” the brokerage said.

 

On market conditions, InCred said global events have increased volatility in the Nifty in recent days, with the index witnessing a sharp 4 per cent swing. However, it added that forward price-to-earnings (P/E) valuations near mean levels, along with improving sales and profit after tax (PAT) growth in the December 2025 quarter, provide comfort. 

High-conviction stock ideas

Reviewing the performance of its high-conviction ideas since the start of the series in September 2022, InCred said Tata Motors Commercial Vehicles, GE Vernova T&D and Thyrocare Technologies have been “big outperformers to Nifty”. In contrast, Camlin Fine Sciences, VRL Logistics and Clean Science and Technology were cited as “underperformers to Nifty” during the same period. 

 

In terms of recent-month performance, the brokerage said GE Vernova T&D and Axis Bank delivered “big absolute returns”.

 

InCred analysts have added UltraTech Cement and Home First Finance Company to its high-conviction list. On UltraTech Cement, it said “earnings visibility remains strong in the medium term”, aided by “better-than-industry volume growth, improving cement prices, cost tailwinds, and renewable energy capacity addition”. 

                                   

That said, for Home First Finance Company, the brokerage cited “continuity of top leadership to drive growth”, an “attractive” risk-reward ratio at “-2SD below mean level”, and a recent correction in the stock price.

 

The analysts, however, removed Deepak Fertilisers & Petrochemicals Corporation from the list, stating that its TAN business “seems to be entering a structural downcycle, with global oversupply and Chinese dumping”.

 

Separately, InCred said technical trends remain favourable for Apollo Tyres and Home First Finance Company.  ========================================== 

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