InCred Equities has recently made strategic adjustments to its longest conviction list, signaling its evolving market outlook. The firm has decided to add Thyrocare Technologies while removing Pidilite Industries, Marico, and SBI Cards. The decision to incorporate Thyrocare is driven by improving business fundamentals and growth potential, while the exit from the other companies is based on a range of factors, including moderating demand and margin pressures.

Why Thyrocare Technologies Was Added to the Conviction List

Thyrocare Technologies, a leader in diagnostic services, has been added to InCred’s longest conviction list due to several positive developments in the company's operations. The company is seeing a significant 15 percent expansion in its network, which is a key growth driver. Additionally, a revised incentive structure for its franchise model has contributed to improved earnings visibility. Furthermore, Thyrocare’s radiology business turnaround has played an important role in enhancing its overall financial performance. These factors collectively point to a strong growth trajectory, making Thyrocare an attractive stock for investors.

Exiting Pidilite Industries, Marico, and SBI Cards

On the other hand, InCred Equities has made the decision to exit several stocks from its long-term conviction list. The exit from Pidilite Industries comes as a result of recent channel checks that indicate a slowdown in demand growth. Analysts have noted that despite the company’s strong brand presence, there are challenges ahead in the coming quarters.

Similarly, Marico has been removed from the conviction list due to growing concerns over rising copra prices, which are putting significant pressure on the company’s margins. Furthermore, Marico’s aggressive diversification strategy has raised some doubts among analysts, which has led to the decision to pare exposure.

As for SBI Cards, the decision to reduce exposure is based on the belief that the stock has already reflected most of its downside. While the company’s market share is stabilizing and credit costs are easing, analysts feel the stock may not offer as much upside potential in the near term.

InCred's Positive Technical Outlook on Adani Ports, Maruti Suzuki, and Petronet LNG

Despite these exits, InCred Equities remains positive on several stocks. The firm continues to maintain a positive outlook on Adani Ports, Maruti Suzuki, and Petronet LNG, highlighting these companies' robust operational performance and growth prospects. Adani Ports is expected to benefit from its expanding infrastructure and favorable regulatory environment, while Maruti Suzuki continues to lead in the automotive sector. Petronet LNG is poised for growth, driven by strong demand for liquefied natural gas (LNG) in India.

Sector Allocation Overview

InCred Equities remains overweight on sectors that are expected to perform well in the current economic climate. These include aluminium, capital goods, financial services, oil and gas, and pharmaceuticals. The firm has maintained a neutral stance on automobiles, auto ancillaries, consumer staples, infrastructure, and IT services. On the other hand, InCred is underweight on sectors such as agri-business, aviation, building materials, chemicals, and metals and mining.

Macroeconomic Indicators and Sector Outlook for April 2025

In terms of macroeconomic indicators, InCred analysts note a mixed trend in April 2025. Goods and Services Tax (GST) collections saw a healthy 12.6 percent year-on-year growth, signaling robust economic activity. Additionally, diesel consumption rose by 4 percent, and electricity demand increased by 2.3 percent, further highlighting growth in industrial activity.

Positive Outlook for Agriculture Sector Amidst Monsoon Forecasts

Looking ahead, meteorological agencies are forecasting a normal to above-normal rainfall during the upcoming southwest monsoon season. This is expected to benefit the agriculture sector, particularly ahead of the kharif sowing period. The predicted rains are likely to boost rural consumption, which will have a positive impact on consumption-driven sectors, providing a further boost to the overall economy.

Indian Rupee Appreciation and Currency Market Trends

In the currency markets, analysts have observed that the Indian rupee (INR) has appreciated in April 2025. This is largely attributed to strong foreign portfolio investment (FPI) inflows, which have helped the rupee gain strength. The weakening US dollar and the decline in Brent crude oil prices have also supported the INR’s upward movement. These favorable external conditions are expected to continue supporting the rupee in the near term.

Conclusion and Investment Strategy

InCred Equities' latest updates reveal that the firm is strategically shifting its focus to stocks with strong growth prospects, such as Thyrocare Technologies, while stepping back from those with weakening fundamentals, like Pidilite and Marico. Analysts remain optimistic about key sectors, including financial services, pharmaceuticals, and oil and gas, and expect continued support for the Indian rupee and agricultural growth in the months to come. As always, investors should closely monitor these developments to make informed decisions in the current market environment.

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