IGI Logo

* Cohesive policy actions by the government (GST 2.0) and the RBI have come to aid the Oct-Nov festive season & provide hope of sustenance in 2H.

* In our high-conviction stocks list, we have introduced Apollo Tyres and upgraded the rating of automobile sector to Overweight (from Neutral).

* Consensus Nifty-50 EPS bottoming out will be a key monitorable in the results season, as the index continues to consolidate at current levels.

Macroeconomic data points provide hope

* The bold reforms in the Goods and Services Tax (GST 2.0), aided by sustained rainfall, seem to be improving high frequency data points, as we enter the festive season with low Consumer Price Index (CPI) inflation and improved system liquidity. The Reserve Bank of India (RBI) has announced 22 new measures in its recent monetary policy to boost the banking sector’s strength, improve credit flow, enhance ease of doing business, and simplify forex rules which will help in the medium term. With domestic consumption revival expected to limit the US import duty impact on India’s exports, Gross Domestic Product (GDP) growth upgrades have started coming from Sep 2025, for the first time in the last one year.

* Nifty-50 stabilized in Sep 2025, after two months of a marginal slide. The near doubledigit cut in Nifty-50 Bloomberg consensus EPS for CY26F-27F may bottom out soon, aided by government policy actions. The India MSCI P/E valuation premium vs. Asia easing to the 10-year mean level provides comfort. We expect the GST reforms to drive the auto sector’s cyclical demand recovery, leading to upgrade of the sector’s rating to Overweight, from Neutral in Sep 2025.

Synopsis of high-conviction stock ideas: Detail stock-wise PPT link

Recent performance (since the start of the series in Sep 2022):

* Outperformers to Nifty: Thyrocare Technologies (ADD), Skipper (ADD), and Shriram Finance (ADD).

* Underperformers to Nifty: Camlin Fine Sciences (ADD), Tata Consultancy Services (ADD), and Lupin (ADD).

Addition to the list: Apollo Tyres (ADD) - GST rate cut will help in normalizing its India business EBITDA margin soon, with the impact of a major provision made for Netherland plant shutdown behind us.

Deletion from the list: E2E Networks (ADD) - It enters the compliance restricted list

Technical trend favourable ideas – Bajaj Auto (ADD) and Bajaj Finance (ADD).

High-conviction ideas – Oct 2025

Above views are of the author and not of the website kindly read disclaimer