Share Market Highlights 07 February 2024: Sensex, Nifty close flat; IT drags, PSBs shine

GFCL EV Products Ltd (GFCL EV), a 100 per cent subsidiary of Gujarat Fluorochemicals Ltd (GFL), on Wednesday announced an investment of ₹6,000 crore over the next four-five years. 

A part of this investment is expected to be made at Dahej in South Gujarat. This investment will enable supply of approximately 200 GWh annually of electric vehicle (EV) and Energy Storage System (ESS) battery solutions.

GFL stock closed at ₹92.00, up by ₹0.75 or 0.82 per cent on Wednesday on NSE.

The rupee appreciated 9 paise to close at 82.96 (provisional) against the US dollar on Wednesday, tracking a correction in the greenback against major currencies and fresh foreign capital inflows.

However, a rise in crude oil prices and muted domestic markets capped the sharp gains in the domestic unit, forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.03 against the greenback. The unit hit an intraday high of 82.94 and a low of 83.09.

HSBC Mutual Fund today announced the launch of HSBC Multi Asset Allocation Fund (HMAAF), an open-ended scheme investing in equity and equity-related instruments, debt & money market securities and Gold/ Silver ETFs. The fund aims to generate long-term capital growth, help reduce volatility and offer diversification. The new fund offering (NFO) opens on 8th February 2024 and closes on 22nd February 2024 and will reopen on 1st March 2024. 

HMAAF will capitalize on an optimum multi asset allocation investment strategy. The fund will follow a flexicap approach and invest across market caps based on prevailing valuation comfort. The investment process considers several factors including the quality of business, competitive advantage, corporate governance track record, sustainability practices, financial strength, risk-reward evaluation, key earnings drivers, etc. The fund will be managed by Cheenu Gupta, SVP Fund Management Equities (for Domestic Equities), Dipan Parikh, VP Dealing Equities (for Gold/ Silver ETFs), Mahesh Chhabria, VP, Fund management Fixed Income (for Fixed Income) and Sonal Gupta, Head Research Equities (for Foreign Securities).

Fashion retailer and hypermarket operator Trent’s consolidated net profit in the December quarter more than doubled from year ago, while revenue rose 50 per cent, driven by brisk sales in its fashion formats.

The Tata group company reported a net profit of ₹374.4 crore on revenue of ₹3,466.6 crore. 

Uno Minda Limited achieved 21% YoY revenue growth in Q3 FY24, totaling to ₹3,523 crore, Interim dividend of ₹0.65 per share was declared. Shares down 1.32% to Rs 682 on the BSE.

The BSE Sensex rose 13.92 pts or 0.02% to 72,172.17. The NSE Nifty gained 1.60 pts or 0.01% to 21,927.80.

A total of 3,943 stocks were actively traded, 2,272 advanced, while 1,572 declined and 101 stocks remained unchanged where 520 stocks hit a 52 week high and 20 stocks hit a 52 week low at 3.08 pm on the BSE

Major losers include- Power Grid corporation (-2.26%), Infosys (-1.97%), Tech Mahindra (-1.63%), Tata consultancy services (-1.22%), Bharat petroleum corporation (-1.18%)

China’s gold reserves increased to 72.19 million fine troy ounces by the end of January, up from 71.87 million ounces at the end of December.

Varroc Engineering reported YoY growth in Profit Before Tax, reaching ₹18,846 million in Q3 FY24, with a 9.4% YoY revenue increase. Order wins totalling Rs 67.57 billion in FY24. shares down 0.35% to Rs 603 on the BSE.

Federal Bank onboards Cholamandalam MS General Insurance Co Ltd under Bancassurance arrangement for providing insurance exclusively for CV/CE Business

DBS Bank India has successfully supported Louis Dreyfus Company India Pvt Ltd (LDC) in securing sustainable financing for the procurement of palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO). The transaction was facilitated through DBS Bank Limited; Singapore and this milestone was achieved through the implementation of the bank’s innovative Supplier Payment Services (SPS) solution.

The SPS solution enables the bank to make early payments on behalf of clients to their suppliers, allowing them to preserve liquidity and while reducing cash flow pressures on the suppliers. The solution is entirely digital and tailored to meet the client’s specific needs.

George Alexander Muthoot, MD, Muthoot Finance on pre-RBI monetary policy expectations:

We believe the RBI may keep a status quo on key policy rates, however the focus on fiscal consolidation in the recent Interim budget by the honourable Finance Minister, may give some headroom to the RBI to change stance to ‘Neutral’ from the current stance of ‘withdrawal of accommodation’. In the backdrop of recent tight system liquidity conditions, the industry will watch out for RBI’s communication and view on system liquidity. Amidst the slowdown in global economy, the resilience of Indian economy clearly stands out, and the Government focus on capex spending along with the RBI’s prudent monetary policy is likely to keep Indian economy on the steady growth trajectory, while keeping the demand conditions intact.

Gold-linked credit line enabled via UPI

While banks offer credit line to companies like an overdraft, on similar lines, banks don’t have a small credit line product for a common man which can help address monthly short term finance needs and as a result the common man either keeps huge balance in savings account, or resorts to a credit card or a personal loan to meet immediate gaps in monthly finance needs. 

We believe that a ‘gold linked credit line via UPI’ will be ideal for common man. For this extending the UPI linkage (payment system) by NBFCs is the first requirement, and once this is allowed, gold loan NBFCs can extend a credit line to common man. Unlike a credit card, this product will work like a secured credit extended by NBFCs and also attract lower interest rate (of 12%-18%) as compared to a higher interest rate (of ~36%) on a credit card.

FMCG major ​Nestle India Ltd​ on Wednesday ​reported an increase of 4.38 per cent in its net profit at ₹655.61 crore for the quarter ended December 31​.

The company had posted a profit of ₹628.06 crore in the same period a year ago, Nestle India said in a regulatory filing.

The shares of Nestle India were trading at ₹2,491.55 apiece on BSE, up 1.37 per cent from its previous close.

Landmark Cars Limited expanded its presence in the electric vehicle sector with approval for its fourth BYD showroom in South Mumbai, shares were up by 3% to Rs 864.50 on the BSE.

Appended is the Grasim Industries Ltd Q3FY24 Result Preview:

For Grasim Industries, we expect the cement business to witness a double-digit EBITDA growth in Q3FY24 due to price hikes observed in most of India, softening fuel prices globally, and growth in demand post the festive season. However, a soft volume growth may be observed in the coming quarter due to elections. On a standalone business basis, the global VSF prices remained under pressure, with margin improvement anticipated solely based on volume improvement. Also, caustic soda prices saw a decline in September 2023 quarter and the same is expected to remain stable in Q3FY24, thereby maintaining margins of standalone business at similar levels. Coming to the new paints business, the company is likely to witness increased costs due to higher recruitments which may lead to a loss in the business. However, we expect volumes in the paint business to pick up going forward and expect the business to return to profitability in the medium term. Overall, we expect the quarterly result to be positive driven by the cement business, said Parth Shah, Research Analyst, StoxBox

Vinati Organics Limited reported effective amalgamation of Veeral Additives Private Limited, marking its authorized share capital to Rs 60 crore. Shares up by 0.25% to Rs 1683.70 on the BSE.

Getalong Enterprise Ltd discloses acquisition of 1,000 equity shares by Westpac Investments Limited expanding its holding to 33.25%.

Gujarat Fluorochemicals Ltd’s subsidiary announced the commencement of its LiPF6 Project, investing Rs 6000 crore over 4-5 years to supply 200 GWh/annually of EV and ESS battery solutions, targeting markets in the US, Europe, and India.

The BSE Sensex rose 90.08 pts or 0.12% to 72,276.17. The NSE Nifty increased 36.10 pts or 0.16% to 21,965.50.

(Nirmal Bang Retail Research)

Result is above expectations 

Revenue from Operations came at Rs. 889.1 Cr (61.8% QoQ, 14.4% YoY) vs expectation of Rs. 888.7 Cr, QoQ Rs. 549.4 Cr, YoY Rs. 776.9 Cr 

EBIDTA came at Rs. 119.7 Cr (17764.2% QoQ, 15.4% YoY) vs expectation of Rs. 110.9 Cr, QoQ Rs. 0.7 Cr, YoY Rs. 103.7 Cr 

EBITDA Margin came at 13.5% vs expectation of 12.5%, QoQ 0.1%, YoY 13.3% 

Adj. PAT came at Rs. 28.2 Cr vs expectation of Rs. 14.9 Cr, QoQ Rs. -64.1 Cr, YoY Rs. 20 Cr 

Quarter EPS is Rs. 14.3 

Stock is trading at P/E of -50.3x FY24E EPS

(Nirmal Bang Retail Research) 

Result has improved 

Revenue from Operations came at Rs. 200 Cr (8% QoQ) vs QoQ Rs. 184 Cr 

EBIDTA came at Rs. 20 Cr (36% QoQ) vs QoQ Rs. 15 Cr 

EBITDA Margin came at 10.2% vs QoQ 8.2% 

Adj. PAT came at Rs. 15.2 Cr vs QoQ Rs. 7.6 Cr 

Quarter EPS is Rs. 1.2 

Stock is trading at P/E of 113.9x TTM EPS

(Nirmal Bang Retail Research) 

Result inline with expectation 

Revenue from Operations came at Rs. 844.5 Cr (-4.2% QoQ, 6.5% YoY) vs expectation of Rs. 873.7 Cr, QoQ Rs. 881.7 Cr, YoY Rs. 792.7 Cr 

EBIDTA came at Rs. 223.1 Cr (-8.4% QoQ, 27.7% YoY) vs expectation of Rs. 220.8 Cr, QoQ Rs. 243.5 Cr, YoY Rs. 174.8 Cr 

EBITDA Margin came at 26.4% vs expectation of 25.3%, QoQ 27.6%, YoY 22% 

Adj. PAT came at Rs. 133.6 Cr vs expectation of Rs. 131.8 Cr, QoQ Rs. 150.6 Cr, YoY Rs. 106.1 Cr 

Quarter EPS is Rs. 8.6 

Stock is trading at P/E of 47x FY24E EPS

(Nirmal Bang Retail Research) 

Result is above expectations 

Revenue from Operations came at Rs. 2312 Cr (1.1% QoQ, 14.7% YoY) vs expectation of Rs. 2306.3 Cr, QoQ Rs. 2285.8 Cr, YoY Rs. 2016.1 Cr 

EBIDTA came at Rs. 378.5 Cr (31% QoQ, 162.1% YoY) vs expectation of Rs. 344.7 Cr, QoQ Rs. 288.9 Cr, YoY Rs. 144.4 Cr 

EBITDA Margin came at 16.4% vs expectation of 14.9%, QoQ 12.6%, YoY 7.2% 

Adj. PAT came at Rs. 109.1 Cr vs expectation of Rs. 96.4 Cr, QoQ Rs. 58.6 Cr, YoY Rs. -49.9 Cr 

Quarter EPS is Rs. 14.2 

Stock is trading at P/E of 28.6x FY24E EPS

(Nirmal Bang Retail Research) 

Result inline with expectation 

Revenue from Operations came at Rs. 4749.7 Cr (17% QoQ, 97.7% YoY) vs expectation of Rs. 5111.6 Cr, QoQ Rs. 4059.5 Cr, YoY Rs. 2402.3 Cr 

EBIDTA came at Rs. 463 Cr (15.9% QoQ, 178.3% YoY) vs expectation of Rs. 489.6 Cr, QoQ Rs. 399.5 Cr, YoY Rs. 166.4 Cr 

EBITDA Margin came at 9.7% vs expectation of 9.6%, QoQ 9.8%, YoY 6.9% 

Adj. PAT came at Rs. 291.9 Cr vs expectation of Rs. 313.5 Cr, QoQ Rs. 384.7 Cr, YoY Rs. 23.2 Cr 

Quarter EPS is Rs. 11.2 

Stock is trading at P/E of 18.8x FY24E EPS

Nestle India reported a 4.4 percent rise in net profit at Rs 655.6 crore for the quarter ended December 31, 2023, compared to Rs 628 crore a year ago. Revenue from operations for the December quarter has jumped 8 percent YoY to Rs 4,600 crore.Total Sales Growth at 8.3%. Domestic Sales Growth at 8.9%.Suresh Narayanan, Chairman and Managing Director, Nestlé India said, “I am pleased to share that despite external challenges, we have once again delivered a strong performance this quarter. Domestic sales grew by 8.9% on the back of pricing and mix growth, with strong growth momentum in e-commerce and out-of-home channels. The quarter was marked by an increase in brand investments across all product groups. I am also pleased to note that during the year 2023, our total sales grew by over 13.3% and we crossed Rs 19,000 crore mark.” The company follows January-December period as financial year

Power Finance Corporation Limited announced the incorporation of its wholly-owned subsidiary, Jamnagar Transmission Limited, for developing a network expansion scheme in Gujarat. The subsidiary aims to draw approximately 3.6 GW of load under Phase-I in the Jamnagar area, Shares up by 1.47% to Rs 460.55 on the BSE

Power Finance Corporation Ltd. was fined Rs 8.80 lakh by the Reserve Bank of India for non-compliance with liquidity risk management regulations. The penalty stems from including callable fixed deposits as high-quality liquid assets, deemed ineligible by the RBI, impacting liquidity ratios.

Bharti Airtel Limited faces a penalty of Rs 1.49 lakhs from the Department of Telecommunications for alleged subscriber verification norm violations.

Northern Arc Capital Limited, a registered NBFC and a diversified financial services company, has appointed Neha Mudaliar as Head of Climate & Renewable Financing. This pivotal role underscores the company’s dedication to advancing environmental sustainability and serves as a testament to Northern Arc’s core values and earnest desire to impact environmental goals on a global scale positively.

NSE nifty was down by 0.14% or 31.15 points to 21,898.25 points, while the BSE Sensex was at 72,047.06 down by 0.19% or 139.03 points at 12.23 pm

Major losers include Bandhan s&p (-11.29%), Syrma SGS technology (-8.31%), Redington (-6.42%), Ncl india (-6.10%), Gujrat state fertilizers and chemicals (-5.33%)

RBI to conduct 2nd one-day variable rate reverse repo auction for Rs 50,000 crore today to drain out liquidity from the banking system. At the first VRRR auction it received offer for placement of funds aggregating Rs 96,093 crore against the notified amount of Rs 50,000 crore.

Continuing its relief rally for the second day, One Communication (Paytm) has gained 9 per cent to Rs 491 with a buy order of over 2 lakh against sell side orders 64,312.

Major gainers on the BSE include, UTI s&p (23.27%), Eih Ltd. (15.97%), Kiocl (14.81%), Action construction equipment (13.95%), Indian overseas Bank (12.81%)

A total of 3,870 stocks were actively traded, 2,075 advanced, while 1,653 declined and 142 stocks remained unchanged where 464 stocks hit a 52 week high and 20 stocks hit a 52 week low at 12.06 pm on the BSE

Jyoti Structures Limited has received an order from Torrent PowerGrid Limited for EPC work of 400 KV multi-circuit transmission line in Gujarat. The contract is valued at ₹290 crore and is to be executed in 18 months.

In addition, the company has also secured a contract for design and prototype testing of towers for the 400 kV Double Circuit Oman – UAE Interconnector Project. The contract, valued at $1.8 million, is to executed in six months.

Shiva Texyarn Limited secured a contract from the Eastern Naval Command for supplying 5,513 NBC Haversack MK-II bags, valued at Rs 1.87 crore. Shares were down by 0.79% to Rs 179.75 on the BSE.

Intellect Design Arena Limited’s Global Consumer Banking arm secured a contract with VakifBank International AG, to employ its eMACH.ai-based Digital Core and Lending platform. Shares up 3.84% to Rs 983 on the BSE.

Mid Market Comment by Shrey Jain, Founder and CEO SAS Online - India’s Deep Discount Broker

In recent sessions, the Nifty has largely traded sideways, reflecting trader uncertainty about its next move. On the option front, strong writing in the 21800 and 21700 Put strikes suggests limited downside potential, while potential resistance is seen around the 22100 and 22150 levels.

Meanwhile, the Bank Nifty lacks a clear trend, awaiting a breakout to determine its direction. Support is established around 45500, with immediate resistance at 46000. A break above 46000 could signal a move towards 46500, with significant open positions in the 46000 Call potentially leading to short covering and further upside momentum

Haryana-based Vibhor Steel Tubes Ltd (VSTL), a manufacturer of high-quality steel tubes and pipes, has set the price range for its initial public offering in the range of ₹141 to ₹151 per share. The IPO will open on February 13, 2024 and close on February 15, 2024. VSTL’s offering comprises a fresh issue of equity shares (face value Rs. 10 each), aggregating to an issue size of up to Rs. 72.17 crore, through book building route. Khambatta Securities Limited is the sole book Running Lead Manager to the Offer and KFIN Technologies Limited as the Registrar to the Offer.

The proceeds from the issue will be utilised for working capital requirements and general corporate purposes. The equity shares of the company are proposed to be listed on the National Stock Exchange of India Limited (NSE) and the BSE Limited (BSE).

1.5x Nifty Accelerator MLD is issued by InCred Financial Services Limited (IFSL)

InCred attained the ‘Unicorn’ status in December 2023

The product has a credit rating of Crisil PP-MLD A+ with ‘Stable’ Outlook.

1st-time access to retail investors with Low Ticket Size

Innovative Investment Product for Retail Investors

Enables investors to participate in the Indian equity growth story with principal protection

MLDs, globally, have over USD 2 Trillion worth of Assets Under Management (AUM)

The 1.5x Nifty MLD provides a return equivalent to 1.5 times of the Nifty 50 Index returns, capped at a maximum of 33% total returns

Sintex, a Welspun World company signed a definitive agreement with leading European supplier Rollepaal under which Rollepaal will supply its state-of-art high quality PVCO pipes manufacturing lines exclusively to Sintex in India. With the signing of this agreement, Sintex is set to write a new chapter in the PVCO pipes manufacturing in India with the already well established cutting-edge technology for PVCO products.

The agreement to this effect was signed between Mr. Ashish Prasad, CEO, Sintex and Mr Henk Hoven, CEO, Rollepaal in presence of Mr. BK Goenka, Chairman of Welspun World.

Britannia Industries Ltd. Q3FY24 Result First Cut - Subdued demand and price competitive environment affecting profitability

# The company recorded a revenue of Rs. 4,256 crores (down 4% QoQ / up 1.4% YoY) compared to market estimates of Rs. 4,296 crores.

# The company earned an EBITDA of Rs. 822 crores (down 5.7% QoQ / up 0.5% YoY) compared to street estimates of Rs. 813 crores.

# The company’s EBITDA margin was 19.3% compared to a margin estimate of 18.9%.

# The company’s PAT stood at Rs. 555 crores (down 5.2% QoQ / down 40% YoY) compared to an estimate of Rs. 552 crores.

View:

FMCG giant Britannia Industries reported Q3FY24 results which saw a dip in revenue on a sequential basis but was up when compared annually. Such subdued growth can be attributed to several factors such as price reduction, intensified local competition and modest single digit volume expansion. Even though the company experienced subdued volume growth, its focus states outperformed other regions in terms of growth. Also, its international business performed well with double digit growth across key markets. The company’s new offerings viz BeYou Bars, Makhanas, JimJam Pops and unique cheese formats continue to excite customers. Going forward, the company shall remain vigilant regarding commodity prices and evolving geopolitical situation. While investing more towards its brands, the company shall aim for sustaining its profitability yet being price competitive. However, we remain vigilant about any meaningful recovery in volumes in the near term due to high competition, subdued prices and volume.

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Bakery food company Britannia Industries Ltd on Tuesday reported a 40.4 per cent decline in consolidated net profit at ₹555.66 crore for the third quarter ended December 2023.

The company had posted a net profit of ₹932.40 crore in the October-December quarter a year ago, Britannia Industries said in a BSE filing.

(Nirmal Bang Retail Research)

Result is broadly in-line with expectations 

Revenue from Operations came at Rs. 4348.6 Cr (-19.3% QoQ, -47.6% YoY) vs expectation of Rs. 4686.5 Cr, QoQ Rs. 5385.5 Cr, YoY Rs. 8296.2 Cr 

EBIDTA came at Rs. 628.5 Cr (2.2% QoQ, -6.2% YoY) vs expectation of Rs. 620 Cr, QoQ Rs. 615 Cr, YoY Rs. 670 Cr 

EBITDA Margin came at 14.5% vs expectation of 13.2%, QoQ 11.4%, YoY 8.1% 

Adj. PAT came at Rs. 459.4 Cr vs expectation of Rs. 364.7 Cr, QoQ Rs. 381 Cr, YoY Rs. 324 Cr 

Quarter EPS is Rs. 11 

Stock is trading at P/E of 10.5x FY25E EPS

(Nirmal Bang Retail Research)

Result ok 

Revenue from Operations came at Rs. 1835.3 Cr (2.1% QoQ, 11.8% YoY) vs QoQ Rs. 1797.5 Cr, YoY Rs. 1641.4 Cr 

EBIDTA came at Rs. 261.4 Cr (9.8% QoQ, -2.2% YoY) vs QoQ Rs. 238.1 Cr, YoY Rs. 267.4 Cr 

EBITDA Margin came at 14.2% vs QoQ 13.2%, YoY 16.3% 

Adj. PAT came at Rs. 108.8 Cr vs QoQ Rs. 90.6 Cr, YoY Rs. 144.3 Cr 

Quarter EPS is Rs. 0.2 

Stock is trading at P/E of 48.4x FY24E EPS

(Nirmal Bang Retail Research)

Result has improved 

Revenue from Operations came at Rs. 797.1 Cr (1.6% QoQ, -4.4% YoY) vs QoQ Rs. 784.7 Cr, YoY Rs. 833.6 Cr 

EBIDTA came at Rs. 157.1 Cr (8.8% QoQ, 23.7% YoY) vs QoQ Rs. 144.3 Cr, YoY Rs. 127 Cr 

EBITDA Margin came at 19.7% vs QoQ 18.4%, YoY 15.2% 

Adj. PAT came at Rs. 107.5 Cr vs QoQ Rs. 109.5 Cr, YoY Rs. 83.9 Cr 

Quarter EPS is Rs. 3.5 

Stock is trading at P/E of 26.2x TTM EPS 

Larsen & Toubro Ltd has bagged multiple orders worth ₹2,500 crore to ₹5,000 crore. The company’s stock exchange filing revealed that its power transmission and distribution (PT&D) business secured orders within the country and the Middle East. 

One such order is to establish a 75MW Floating Solar PV plant on the Panchet Dam. The plant is part of the Ultra Mega Renewable Energy Power Park, being developed on Damodar Valley corporation reservoirs in Jharkhand and West Bengal

The BSE Sensex rose 97.14 pts or 0.13% to 72,283.23. The NSE Nifty gained 46.65 pts or 0.21% to 21,976.05.

Jyoti Structures Limited secured orders including a Rs 290 crore EPC contract for a 400 KV Multi Circuit Transmission Line in Gujarat from Torrent PowerGrid Limited, a USD 1.8 million contract for tower design and testing for the 400 kV Double Circuit Oman – UAE Interconnector Project. Shares were up by 4.99% to Rs 32.81 on the BSE.

Larsen and Toubro Ltd’s Construction’s Power Transmission & Distribution business arm secured multiple orders, including a 75MW Floating Solar PV plant on Panchet Dam, a 380kV Substation construction, voltage conversion orders in Kuwait and Saudi Arabia, alongside an order for a 220kV Power Supply Project in the UAE. Shares were up by 0.52% to Rs 3441.50 on the BSE.

Bank Nifty opened today’s session with a gap-up at 45,945 versus yesterday’s close of 45,691. The index is now hovering around 45,880, up 0.4 per cent.

The advance/decline ratio of Nifty 50 stands at 9/3, giving it a bullish bias.

Tata Steel Ltd announced the amalgamation of businesses like Tata Steel Mining Limited, Tata Steel Long Products Limited, S&T Mining Company Limited, The Tinplate Company of India Limited, and Tata Metaliks Limited. The merger process for three other entities is underway, while TRF Ltd. has decided not to pursue amalgamation. Shares were up by 1.26% to Rs 147.25 on the BSE.

Elara Securities:-

Century Plyboards

Rating: ACCUMULATE

Target Price: INR 850

Upside: 16%

CMP: ₹734

Century Plyboards’ (CPBI IN) Q3 net sales rose 6.1% YoY to ~INR 9.37bn, led by strong growth in medium-density fiberboard (MDF), up 12.5% YoY, while other segments of plywood (up 5.9% YoY) and laminates (up 2.6% YoY) saw muted growth. Subdued demand for wood panel segment hit plywood and laminates growth. Volumes in MDF (up 15% YoY) and Particle Board (up 18% YoY) were robust but realization was hit by higher import competition. The management anticipates continued slow pace in the wood panel market until the commencement of deliveries for the current surge in new launches in ongoing real estate projects, starting 2025. 

We cut FY25E/26E earnings estimates 8%/2% to factor in lower revenue and profitability. We revise CPBI to Accumulate from Buy as the stock has run up 19% in the past three months, with higher TP of INR 850 (from INR 800), on 35x FY26E P/E as we roll-forward to FY26E.

Equity benchmark indices climbed in early trade on Wednesday amid buying in shares of State Bank of India and Reliance Industries along with firm trends in the US markets.

Fresh foreign fund inflows also added to the positive momentum in equities.

Extending its previous day’s rally, the 30-share BSE Sensex jumped 373.12 points to 72,559.21 in early trade. The Nifty climbed 123.9 points to 22,053.30.

Among the Sensex firms, State Bank of India, Axis Bank, JSW Steel, Tata Steel, Titan, Kotak Mahindra Bank, Bajaj Finance, Bajaj Finserv, Sun Pharma and Reliance Industries were the major gainers.

Sealmatic India Limited secured an approval from Abu Dhabi National Oil Company (ADNOC) for its mechanical seals. Shares up by 8.46% to Rs 673.95 on the BSE.

TRF Limited announced withdrawal of the Scheme of Amalgamation with Tata Steel Limited, citing improved business performance and stakeholder value enhancement. Shares surge 19.99% to Rs 328.40 on the BSE.

The rupee appreciated 2 paise to 83.03 against the US dollar in early trade on Wednesday supported by positive domestic equities.

Moreover, the weakness of the American currency in the overseas market also aided sentiments.

At the interbank foreign exchange, the rupee opened at 83.03 against the dollar, registering a gain of 2 paise over its previous close.

The rupee (INR) was stable on Tuesday and closed at 83.05 versus the dollar (USD). The local currency had closed at 83.11 last Tuesday. Although, INR has gained over the past week, it has been facing downward pressure in the last three sessions. 

After marking a high of 82.82 on Friday, the rupee depreciated as the dollar rallied. Following better-then-expected non-farm payroll numbers released on Friday last week, the greenback rose sharply. Over the past week, the dollar index (DXY) moved up nearly 1 per cent and is now trading around 104.50

Silver prices remained in range as buyers waited for talks this week from a number of Federal Reserve officials to get a better idea of what the bank is likely to do with interest rates. In the last two sessions, prices went down because the dollar rose after some good U.S. economic data and words from Fed Chair Jerome Powell that the central bank probably won’t cut interest rates in March. This week, the market will be paying attention to what at least five more Fed officials say. Later, it will turn its attention to next week’s inflation report, which is due next Tuesday, for more information on Fed policy.

Key economic data slated for release includes German Industrial Production m/m from Euro Zone and Trade Balance from US Zone.

Gold prices were not moving in a clear direction as traders waited for words from several Federal Reserve officials this week to figure out when the U.S. central bank might start lowering interest rates. Fed members said that when the U.S. economy does what they expect it to do, it could lead to rate cuts. However, the battle against inflation is “not done yet.” Traders put less faith in a May U.S. rate cut after jobs and services sector data came in better than expected. They now think that there will be four quarter-point cuts in 2024.

Key economic data slated for release includes German Industrial Production m/m from Euro Zone and Trade Balance from US Zone.

Godawari Power and Ispat Limited received environmental clearance to expand its Iron Ore Pelletization Plant capacity from 2.7 to 4.7 MTPA in Siltara Industrial Area, Raipur. Shares were up by 4.69% to Rs 797.35 on the BSE.

JM

Result Update - Mehul Desai BUY INR 5,380

Britannia’s Dec-Q earnings were broadly inline with our estimates with a tad better-than-expected topline, though still soft. Volumes grew c.5% with pricing down 2-2.5% yoy during the quarter after the steep pricing growth seen from end-FY22 to early-FY24. Management commented that demand scenario is progressively recovering, but rural demand was generally subdued and challenges relating to heightened competition remained. Gross margin continued to expand well and surprised positively again (50bps beat vs our forecast) - up yoy and also qoq despite the price-cuts undertaken during the quarter - a rather benign input-costs environment helped in this regard. Staff costs were significantly above recent run-rate but the impact from the same was partly offset by very well-controlled ‘Other Expenses’ which rose just 1.4% - likely helped by some rationalisation in ad-spends as well. We expect Britannia’s topline and profit growth to remain soft over the near-term.

JM Financial

Result Update - Dayanand Mittal BUY INR 1,265

Bharti’s 3QFY24 consolidated EBITDA at INR 203bn (up 2.1% QoQ and 8.3% YoY) was in line with JMFe (but higher than consensus of INR 198bn) despite some adverse impact of currency devaluation on the Africa business. However, India wireless EBITDA was 1% above JMFe at INR 119bn (+3.7% QoQ and +14.5% YoY) as ARPU rose by INR 5 QoQ to INR 208, driven by improved subs (subscribers) mix and rise in AMDU on back of robust 4G net adds (of 7.4mn) and post-paid subs net adds (of 0.9mn). EBITDA margin improved 20 bps QoQ to 55.1%. Traction in FTTH business remained strong; however, enterprise business growth continues to be subdued due to slowdown in the global business. Consolidated capex was flattish QoQ at INR 93bn (including India business capex of INR 78bn); net debt declined by INR 51bn to INR 1,424bn at end-3QFY24. We maintain BUY on Bharti (revised TP of INR 1,265) as we believe India wireless business tariff hikes are likely to be more frequent, going forward, given the consolidated industry structure and higher ARPU requirement for Jio also to justify significant 5G capex. ARPU growth aided by likely moderation in capex will drive Bharti’s FCF from FY25, enabling it to get to net cash by FY29; this will also aid in accretion in equity value.

Suraj Estate Developers Limited unveils ‘Suraj Lumina,’ a residential project in Mumbai’s Mahim area, offering 35 units with 2BHK and 3BHK. Company reported amenities like car parking, security, an open sky garden and sea view. It is expected to be completed by December 2028. The shares were up by 4.65% to Rs 340.45 on the BSE.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

“A significant feature of the ongoing bull market is its ability to bounce back from dips. This makes the buy on dips strategy successful. The bounce back happening now is being led by IT and supported by autos and pharma even while Bank Nifty continues to decline. The fact that new leaders are emerging to take the market forward indicates that the uptrend is intact and new record highs are possible soon.

An area of concern is the excessive speculation in low-grade stocks where many are doubling in a few days. These excesses of a bull market warrant caution.

Investors should stay in the comfort of high quality stocks.”

The 83.06 region, a consolidation point, has appeared as a sticky region standing in the way of a recovery move that would otherwise have targeted 83.14/83.20. We will keep such hopes alive, with downsides expected to not penetrate the 83-82.9 region.

Nifty weekly contract has highest open interest at 22500 for Calls and 21000 for Puts while monthly contracts have highest open interest at 23000 for Calls and 21000 for Puts. Highest new OI addition was seen at 22600 for Calls and 21900 for Puts in weekly and at 22200 for Calls and 21500 for Puts in monthly contracts. FIIs increased their future index long position holdings by 8.84%, increased future index shorts by 3.81% and in index options by 11.35% in Call longs, 4.29% in Call short, 0.07% in Put longs and 0.95% in Put shorts. 

While downsides never sought to challenge the 21720 region again, upside attempts grew from strength to strength through the day, finally bringing down our upside marker placed at 21879, convincingly. This paves the way for 22450-550 objectives that we had started the week with. While we eye 22200-240 initially, pull back below 21870 could deflate the upside possibilities, though an outright collapse is less expected.

Major gainers on the NSE at 9.30 am include HDFC Bank (3.16%), State Bank of India (2.71%), Sbi life insurance company (1.71%), Axis Bank (1.78%), Coal India (1.75%)

Major Losers include Bharat petroleum corporation (-1.60%), HCl technologies (-1.30%), Infosys (-1.12%), Power Grid corporation (-0.78%), Wipro (-0.71%)

Nippon India Mutual Fund has launched Nifty IT and Nifty Bank indices.

Investors in these passively managed index funds will get an entire basket of stocks rather than individual companies.

The New Fund Offers will close for subscription on February 16.

Crude oil futures traded higher on Wednesday morning as the US is expecting its crude oil production to remain steady during the year. At 9.18 am on Wednesday, April Brent oil futures were at $78.76, up by 0.22 per cent; and March crude oil futures on WTI (West Texas Intermediate) were at $73.51, up by 0.27 per cent. February crude oil futures were trading at ₹6115 on Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning against the previous close of ₹6084, up by 0.51 per cent; and March futures were trading at ₹6140 as against the previous close of ₹6113, up by 0.44 per cent.

On Wednesday, the Indian benchmark equity indices, namely Sensex and Nifty, started the day on a positive note, following global cues, primarily driven by realty stocks. The 30-share BSE Sensex surged by 325.62 points, reaching 72,511.72 in early trading. Similarly, the NSE Nifty saw an increase of 109 points, rising to 22,038.40. 

Besides global signal, analysts await RBI monetary policy outcome on Thursday. While the broad expectation is status-quo, marketmen would keenly watch the tone and tenor of the RBI meet outcome.

Ajit Mishra, SVP - Technical Research, Religare Broking Ltd, said that all key sectors, barring banking, are attracting buying on a rotational basis, helping the index maintain a positive tone amid consolidation. “The recent price action indicates the prevailing tone to continue and traders should maintain their focus on stock selection. We reiterate our preference for metal, IT, auto and pharma for long trades and suggest staying selective in the others,” he said.

Global cues are positive, with most Asia-Pacific equities gaining nearly one per cent in the green.

A technical analysis of the daily chart revealed a flat opening for the Nifty, followed by a sustained upward movement, forming a hammer candlestick pattern with substantial volume. This pattern suggests a bullish momentum in the index, said Mandar Bhojane, Research Analyst, Choice Broking.

“There is an anticipation that the Nifty could reach an all-time high in the next few sessions, especially as the earnings season progresses into the second week,” he added.

Currently, the 21,700 level serves as immediate support for the Nifty. On the upside, resistance levels are identified at 20,200 and 20,500. He further said that the overall chart pattern, coupled with positive market breadth and sectoral performance, indicates a favourable outlook for the Nifty, with the potential for further upward movement.

The Bengaluru-headquartered Jana Small Finance Bank’s public issue is set to open today at a price band of ₹393-414. The IPO will close on Friday (February 7). The lot size is 36 shares.

The ₹570-crore IPO consists of a fresh issue of ₹462 crore and an offer for sale of ₹108 crore as offer for sale. Jana Holdings, the promoter holding 32 per cent of the bank, will reduce its stake to around 25 per cent post-issue.

The ₹523-crore initial public offering of Capital Small Finance Bank opens today for public subscription with a price band of ₹445-468. The issue will close on February 9 (Friday) and the minimum lot size is 32 shares.

The IPO consists of ₹450 crore of a fresh issue and ₹73 crore of an Offer For Sale, through which promoters and external investors will dilute 5 per cent of their pre-issue holdings. Those selling shares in the OFS include Oman India Joint Investment Fund II, American Capital, and Amicus Capital Private Equity.

Equal-Weight Call, Target Rs 1,190

Growth Priced In 

Strong Execution Is Reflected In Strong 4G & Postpaid Net Adds 

Strong YoY Growth In India EBITDA Without Much Support From Increase In Tariffs 

Stock Has Run Up, +27% In 6 Months Vs 9% For Sensex & Positives Are Priced In

Buy, TP Raised to Rs 575

Highest-ever Q3 EBITDA was driven by better-than-expected trading; b/s strongest among peers 

Strong outlook driven by favourable demand-supply, market share gain, improving cost efficiencies, &continued growth

Downgarde to hold, TP Rs 225 

Weak demand from Chinese real estate driving PVC segment lower; expect improvement only towards end of 2024 

Pipe demand and margins in agribusiness remain lacklustre 

Downgrade due to lack of catalysts which could improve earnings

Buy, TP Rs 230

Strong 3QFY24 op margin in seasonally weak quarter reflects structural improvement in cost efficiencies 

CV industry trends should be stable in the long term, and we estimate a FY24-FY27e CAGR of 6%

Jefferies 

Hold, TP cut to Rs 2950 from Rs 3425 

Weak; Near-term Pain to Persist 

Rev/Ebitda came in 12%/47% below as co continued to face product deferrals, execution challenges& -ve op lev. 

Mgmt guidance turned more cautious 

Cut FY24/25/26E Ebitda 22%/28%/23%

Buy, TP Rs 210

3Q EBITDA missed forecasts as weak demand weighed across line items. 

Ad income lower as BPC brands prioritised discounts over marketing spends while discounts rose on own label, impacting GM. 

BPC contribution margin compressed to 7 qtr low 

HSBC on Nykaa

Buy, TP Rs 240 

Rev growth of 22% (led by BPC GMV growth of 25% and Fashion at 40%) was strong amid weak demand environment 

EBITDA margin a tad lower than expected 

Think Nykaa with its scale is formidable in BPC and fashion is on superior track now 

Jefferies

Buy, TP Rs 2700 

Back to back record pre-sales qtr & a strong launch pipeline for 4Q, puts Godrej Prop in range for another 50%+ sales growth this year 

Management expects PAT margins to jump to 15-18% range vs 10% previously 

CLSA

Sell, TP Rs 2110 

Cash flow continues to lag; spending on land continues to raise debt 

3QFY24: record presales but cash flow lags 

Raises FY25 presale guidance & it expects 20% growth in mid-term 

Raise presale est. 15%-17% over FY24-26

Outperform Call, Target Raised To Rs 560

Co Is A Cost Leader In A Complex, Tech-intensive Biz Exposed To India’s Large e-Comm Growth Runway 

Forecast A 20% 10-year Core Revenue CAGR With Strong Scale Benefits 

Expect Net Profit Breakeven In FY25

Issue Open - 07-February-24 (Today)

Issue Close - 13-February-24 

Right issue Size: Rs. 3,693.40 Crs (24.62 Crs Shares) 

Stock Price – 186.10 /- 

Right issue Price: Rs. 150 /- 

Payment Terms: Rs.150 /- (On application Rs. 50 and Balance will be called within 12 months from the date of allotment) 

Rights Entitlement Ratio: 1 Rights Equity Shares for every 2 (Effectively 0.50 for every 1 share held). 

Last Trade date (Cum Right): 31 January 2024 

Ex-Right Trading date: 01 February 2024 

Record Date: 01 February 2024 

Right Entitlement (RE) Trading Period:- 07 February 2024 to 08 February 2024 

Last day of Renunciation of Rights Entitlements: 08 February 2024 

Date of Allotment (on or about): 22 February 2024 

Date of listing (on or about): 28 February 2024

Ex-Dividend 08 February 2024 (Tomorrow)

Last date for Cum-Dividend Today 

Ajanta Pharma Ltd. 

Dividend Per Share Rs.26 

Previous day Closing Price – Rs. 2268.4 

Gillette India Ltd. 

Special Dividend Per Share Rs. 40 

Dividend Per Share Rs.45 

Previous day Closing Price – Rs. 6797.95 

India Motor Parts & Accessories Ltd. 

Dividend Per Share Rs.9 

Previous day Closing Price – Rs. 1166.25 

IRB Infrastructure Developers Ltd. 

Dividend Per Share Rs.0.1 

Previous day Closing Price – Rs. 69.99 

ITC Ltd. 

Dividend Per Share Rs.6.25 

Previous day Closing Price – Rs. 431.4 

Shree Cement Ltd. 

Dividend Per Share Rs.50 

Previous day Closing Price – Rs. 27586.1 

Tinna Rubber And Infrastructure Limited 

Dividend Per Share Rs.3 

Previous day Closing Price – Rs. 697.45 

Vaibhav Global Ltd 

Dividend Per Share Rs.1.5 

Previous day Closing Price – Rs. 488.8

UPL: Moody’s Investors Service downgraded the company’s senior unsecured rating to ‘Ba1’ from ‘Baa3’ on deterioration in the agrochemical industry fundamentals.

JB Chemicals & Pharmaceuticals: The company appointed Narayan Saraf as chief financial officer effective Feb. 23.

Biocon: The company received USFDA tentative approval for Dasatinib tablets, which are used in the treatment of the Philadelphia chromosome.

Lupin: The company received USFDA approval from ANDA for bromfenac ophthalmic solution, which is a generic of bromsite.

Power Finance Corp: The company incorporated Bhadla-III and Bikaner-III 

transmission as a wholly owned subsidiary for the development of transmission system strengthening for interconnections of the Bhadla III and Bikaner-II complexes.

Yasho Industries: The company begins a trial run at the Bharuch unit for manufacturing industrial chemicals.

Karnataka Bank: The company received an RBI nod for exercising the call option on bonds.

Mahindra Lifespace Developers: The company received an Irdai nod for a Rs 1,612 crore capital infusion by Axis Bank, subject to CCI approval.

Mahindra Life: The company received a Rs 2.3 crore penalty for non-adherence to forest norms.

1 ASHOKLEY

2 HINDCOPPER

3 INDIACEM

4 INDUSTOWER

5 NATIONALUM

6 UPL

7 ZEEL

Steel Strips Wheels: Promoter Sunena Garg sold 14.63 lakh shares on Feb. 

5.

Paisalo Digital: Promoter group Equilibrated Venture Cflow bought 18.06 

lakh shares on Feb. 6.

Krishna Institute of Medical Sciences: India Advantage Fund sold 10.7 

lakh shares (1.33%), while SBI Life Insurance bought 11.49 lakh shares 

(1.43%) at Rs 2085 apiece.

Global Surfaces: Vikasa India EIF I Fund - Incube Global Opportunities 

sold 2.2 lakh shares (0.51%) at Rs 300.21 apiece.

HFCL: MN Ventures sold 75 lakh shares (0.52%) at Rs 98.01 apiece.

Tourism Finance Corp: Shruti Mohta sold 10.66 lakh shares (1.18%) at Rs 

220.39 apiece.

Aarti Pharmalabs, AIA Engineering, Apollo Tyres, Ashoka Buildcon, Aditya Vision, Borosil Renewables, Cummins India, Dreamfolks Services, Electronics Mart India, EPL, FDC, Gujarat Fluorochemicals, Fortis Healthcare, First Source Solution, General Insurance Corporation of India, Guajarat Industries Power, GMR Power and Urban Infra, Gujarat Narmada Valley Fertilizers & Chemicals, HBL Power Systems, Hemisphere Properties India, HMT, India Pesticides, Jamna Auto Industries, JK Paper, Kalpataru Projects International, Lupin, Manappuram Finance, Navneet Education, Nestle India, Nocil, PDS, Piccadily Agro Industries, Power Grid Corporation of India, Protean eGov Technologies, Religare Enterprises, Safari Industries (India), Sanghvi Movers, Shivalik Bimetal Controls, Shalby, Sobha, Solar Industries India, Star Cement, Tata Consumer Products, Trent, UNO Minda, and Varroc Engineering.

Revenue up 0.03% at Rs 51.56 crore vs Rs 51.54 crore.

EBIT up 17.34% at Rs 2.3 crore vs Rs 1.96 crore. 

Margin up 65 bps at 4.46% vs 3.8%. 

Net profit up 853.84% at Rs 1.24 crore vs Rs 0.13 crore. 

Revenue up 0.45% at Rs 612.21 crore vs Rs 609.44 crore (Bloomberg estimate: Rs 642.5 crore).

Ebitda down 1.18% at Rs 102.48 crore vs Rs 103.7 crore (Bloomberg estimate: Rs 122.93 crore 

Margin down 27 bps at 16.73% vs 17.01% (Bloomberg estimate: 19.10%). 

Net profit down 4.29% at Rs 67.53 crore vs Rs 70.56 crore (Bloomberg estimate: Rs 94.03 crore). 

Revenue up 23.6% at Rs 288.69 crore vs Rs 233.55 crore (Bloomberg estimate: Rs 282.23 crore).

Ebitda up 10.49% at Rs 139.74 crore vs Rs 126.47 crore (Bloomberg estimate: Rs 139.24 crore). Margin down 574 bps at 48.4% vs 54.15% (Bloomberg estimate: 49.30%). 

Net profit down 9.87% at Rs 43.79 crore vs Rs 48.59 crore (Bloomberg estimate: Rs 45.13 crore). 

Revenue up 3.21% at Rs 296.03 crore vs Rs 286.8 crore.

Ebitda loss at Rs 274.43 crore vs loss of Rs 277.72 crore. 

Net loss at Rs 307.72 crore vs loss of Rs 309.81 crore.

Revenue up 34.1% at Rs 1,160.92 crore vs Rs 792.16 crore.

Ebitda up 47.45% at Rs 142.81 crore vs Rs 96.85 crore. 

Margin at 12.3% vs 12.22%. 

Net profit up 22.73% at Rs 75.15 crore vs Rs 61.23 crore. 

Revenue down 0.6% at Rs 520.39 crore vs Rs 523.48 crore (Bloomberg estimate: Rs 635.5 crore).

Ebitda up 3.91% at Rs 44.35 crore vs Rs 42.68 crore (Bloomberg estimate: Rs 85.8 crore). 

Margin at 8.52% vs 8.15% (Bloomberg estimate: 13.5%). 

Net profit down 2.94% at Rs 23.08 crore vs Rs 23.78 crore (Bloomberg estimate: Rs 56 crore). 

Revenue up 6.46% at Rs 272.4 crore vs Rs 255.87 crore.

Ebitda up 6.62% at Rs 26.87 crore vs Rs 25.2 crore. 

Margin at 9.86% vs 9.84%. 

Net profit up 8.95% at Rs 19.71 crore vs Rs 18.09 crore. 

Revenue down 42.29% at Rs 2,007.75 crore vs Rs 3,478.99 crore (Bloomberg estimate: Rs 2,363.2 crore).

Ebitda down 68.9% at Rs 107.61 crore vs Rs 345.76 crore (Bloomberg estimate: Rs 219.80 crore). 

Margin at 5.35% vs 9.93% (Bloomberg estimate: 9.3%). 

Net profit down 71.21% at Rs 117.99 crore vs Rs 409.93 crore (Bloomberg estimate: Rs 141.7 crore). 

Revenue up 15.54% at Rs 329.69 crore vs Rs 285.34 crore.

Revenue up 15.54% at Rs 329.69 crore vs Rs 285.34 crore. 

Ebitda up 65.89% at Rs 32.2 crore vs Rs 19.41 crore. 

Margin up 296 bps at 9.76% vs 6.8%. 

Net profit up 102.74% at Rs 17.72 crore vs Rs 8.74 crore. 

Revenue up 7.79% at Rs 320.4 crore vs Rs 297.24 crore.

EBIT up 82.15% at Rs 21.13 crore vs Rs 11.6 crore. 

Margin up 269 bps at 6.59% vs 3.9%. 

Net profit up 22.08% at Rs 29.52 crore vs Rs 24.18 crore. 

Revenue up 26.4% at Rs 741.26 crore vs Rs 586.41 crore.

Ebitda up 55.2% at Rs 324.39 crore vs Rs 209.01 crore. 

Margin up 811 bps at 43.76% vs 35.64%. 

Net profit up 52.19% at Rs 229.94 crore vs Rs 151.08 crore. 

Revenue up 22.23% at Rs 2,561.1 crore vs Rs 2,095.2 crore (Bloomberg estimate: Rs 2,625.48 crore).

Ebitda up 24.85% at Rs 298.99 crore vs Rs 239.47 crore (Bloomberg estimate: Rs 336.69 crore). 

Margin up 24 bps at 11.67% vs 11.42% (Bloomberg estimate: 12.8%). 

Net profit up 40.7% at Rs 152.28 crore vs Rs 108.23 crore (Bloomberg estimate: Rs 165.69 crore). 

Revenue down 21.63% at Rs 7,770.14 crore vs Rs 9,913.9 crore.

Ebitda down 53.83% at Rs 420.98 crore vs Rs 911.67 crore. 

Margin down 377 bps at 5.41% vs 9.19%. 

Net profit down 55.04% at Rs 216.52 crore vs Rs 481.6 crore. 

Revenue at Rs 468.02 crore vs Rs 451.83 crore, up 3.58%.

EBIT at Rs 56.73 crore vs Rs 57.24 crore, down 0.9%. 

Margin at 12.12% vs 12.66%, down 54 bps. 

Net profit at Rs 48.04 crore vs Rs 45.86 crore, up 4.75%. 

Revenue up 8.44% at Rs 23,504.97 crore vs Rs 21,674.31 crore (Bloomberg estimate: Rs 24,979.65 crore).

Ebitda down 11.03% at Rs 517.3 crore vs Rs 581.42 crore (Bloomberg estimate: Rs 548.78 crore). 

Margin down 48 bps at 2.2% vs 2.68% (Bloomberg estimate: 2.20%). 

Net profit down 11.42% at Rs 347.88 crore vs Rs 392.75 crore (Bloomberg estimate: Rs 323.8 crore). 

Total income at Rs 12,359.19 crore vs Rs 8,898.35 crore, up 38.89%.

Net profit at Rs 171.21 crore vs Rs 269.35 crore, down 36.43%. 

Max Life Insurance gets IRDAI nod to raise capital worth Rs 1,612 crore. 

Revenue down 4.26% at Rs 408.31 crore vs Rs 426.45 crore.

Ebitda up 48.56% at Rs 34.75 crore vs Rs 23.39 crore. 

Margin up 302 bps at 8.51% vs 5.48%. 

Net profit up 105.52% at Rs 10.79 crore vs Rs 5.25 crore. 

Revenue down 1.31% at Rs 166.76 crore vs Rs 168.96 crore.

Ebitda up 5.48% at Rs 54.59 crore vs Rs 51.75 crore. 

Margin up 210 bps at 32.73% vs 30.62%. 

Net profit down 14.44% at Rs 32.11 crore vs Rs 37.53 crore. 

Revenue up 47.59% at Rs 392.27 crore vs Rs 265.78 crore.

Ebitda up 70.67% at Rs 90.08 crore vs Rs 52.78 crore. 

Margin up 310 bps at 22.96% vs 19.85%. 

Net profit up 58.17% at Rs 71.43 crore vs Rs 45.16 crore.

Revenue up 9.68% at Rs 622.26 crore vs Rs 567.3 crore.

Ebitda up 37.09% at Rs 150.19 crore vs Rs 109.55 crore. 

Margin up 482 bps at 24.13% vs 19.31%. 

Net profit up 26.09% at Rs 67.12 crore vs Rs 53.23 crore. 

Revenue up 6.98% at Rs 2,881.83 crore vs Rs 2,693.59 crore.

Ebitda up 37.29% at Rs 480.04 crore vs Rs 349.65 crore. 

Margin up 367 bps at 16.65% vs 12.98%. 

Net profit up 49.2% at Rs 300.16 crore vs Rs 201.17 crore. 

Revenue up 43.08% at Rs 1,173.77 crore vs Rs 820.31 crore (Bloomberg estimate: Rs 1,053.15 crore).

Ebitda up 26.02% at Rs 262.04 crore vs Rs 207.92 crore (Bloomberg estimate: Rs 295.96 crore). 

Margin down 302 bps at 22.32% vs 25.34% (Bloomberg estimate: 28.10%). 

Net profit up 30.71% at Rs 55.79 crore vs Rs 42.68 crore (Bloomberg estimate: Rs 118.08 crore). 

Approved raising Rs 1,500 crore via bonds and equity. 

Revenue flat at Rs 310 crore.

Ebitda down 6.6% at Rs 101.71 crore vs Rs 108.86 crore. 

Margin down 230 bps at 32.8% vs 35.1%. 

Net profit down 6.1% at Rs 72.1 crore vs Rs 76.8 crore.

Revenue up 8.28% at Rs 199.51 crore vs Rs 184.24 crore.

EBIT up 47.22% at Rs 18.58 crore vs Rs 12.62 crore. 

Margin up 246 bps at 9.31% vs 6.84%. 

Net profit up 100.52% at Rs 15.22 crore vs Rs 7.59 crore.

Revenue down 13.99% at Rs 3,164.4 crore vs Rs 3,679.01 crore.

Ebitda down 33.47% at Rs 904.7 crore vs Rs 1,359.71 crore. 

Margin down 836 bps at 28.58% vs 36.95%. 

Net profit at Rs 254.1 crore vs loss of Rs 396.4 crore. 

Revenue up 6.53% at Rs 844.51 crore vs Rs 792.71 crore (Bloomberg estimate: Rs 860.43 crore).

Ebitda up 27.66% at Rs 223.12 crore vs Rs 174.77 crore (Bloomberg estimate: Rs 213.40 crore). 

Margin up 437 bps at 26.42% vs 22.04% (Bloomberg estimate: 24.80%). 

Net profit up 25.89% at Rs 133.57 crore vs Rs 106.1 crore (Bloomberg estimate: Rs 133.70 crore). 

Appointed Narayan Saraf as Chief Financial Officer effective Feb. 23. 

Board declares interim dividend of Rs 5.5 per share. 

Revenue down 10.54% at Rs 1,308.92 crore vs Rs 1,462.99 crore.

Ebitda up 80.36% at Rs 330.91 crore vs Rs 183.47 crore. 

Margin up 1,274 bps at 25.28% vs 12.54%. 

Net profit up 79.05% at Rs 229.16 crore vs Rs 127.98 crore. 

Revenue up 14.43% at Rs 889.05 crore vs Rs 776.88 crore (Bloomberg estimate: Rs 888.94 crore). 

Ebitda up 15.44% at Rs 119.69 crore vs Rs 103.68 crore (Bloomberg estimate: Rs 106.04 crore). 

Margin up 11 bps at 13.46% vs 13.34% (Bloomberg estimate: 11.90%). 

Net profit up 41.36% at Rs 28.23 crore vs Rs 19.97 crore (Bloomberg estimate: Rs 16.46 crore). 

Revenue up 18.7% at Rs 1,789 crore vs Rs 1,507 crore (Bloomberg estimate: Rs 1,790.10 crore).

Ebitda up 22.5% at Rs 98.7 crore vs Rs 80.6 crore (Bloomberg estimate: Rs 115.9 crore). 

Margin up 16 bps at 5.5% vs 5.53% (Bloomberg estimate: 6.5%). 

Net profit at Rs 17.4 crore vs Rs 7.8 crore (Bloomberg estimate: Rs 32.55 crore). 

Approves further investment of up to Rs 150 crore in Nykaa Fashion via rights issue. 

Revenue down 7.7% at Rs 304.91 crore vs Rs 330.43 crore.

Ebitda up 3% at Rs 24.7 crore vs Rs 24 crore. 

Margin up 84 bps at 8.09% vs 7.25%. 

Net profit up 54.6% at Rs 8.41 crore vs Rs 5.44 crore. 

Revenue down 10.96% at Rs 501.82 crore vs Rs 563.58 crore (Bloomberg estimate: Rs 522.42 crore).

Ebitda down 51.37% at Rs 75.67 crore vs Rs 155.58 crore (Bloomberg estimate: Rs 121.98 crore). 

Margin down 1,252 bps at 15.07% vs 27.6% (Bloomberg estimate: 23.30%). 

Net profit down 26.78% at Rs 78.02 crore vs Rs 106.56 crore (Bloomberg estimate: Rs 63.88 crore). 

ADVERTISING Revenue up 1.4% to Rs 4,256.3 crore vs Rs 4196.8 crore (Bloomberg estimate Rs 4,296.2 crore)

Ebitda up 0.4% to Rs 821.09 crore vs Rs 817.58 crore (Bloomberg estimate Rs 813.1 crore). 

Margin at 19.3% vs 19.5% (Bloomberg estimate 18.9%). 

Net profit down 40.4% to Rs 555.6 crore vs Rs 932.4 crore (Bloomberg estimate Rs 552.8 crore).

Fitch has also affirmed the rating on India Toll Roads’ US dollar senior secured notes at ‘BB’. The Outlook is Stable.

RATING RATIONALE

The affirmation reflects Fitch’s expectation of robust traffic performance by IRB’s diverse and strategically located portfolio of assets, helped by our anticipation of strong Indian GDP growth. The ratings also consider the company’s record in operating and maintaining the group’s assets to a high standard, with expertise provided by the in-house engineering, procurement and construction (EPC) business. 

IRB is a leader in India’s road sector, managing more than 15,000 lane km of build-operate-transfer (BOT), toll-operate-transfer (TOT) and hybrid-annuity-model road assets across 12 states. It has added close to INR250 billion in road assets in the past three years. IRB’s strategy will be to focus on BOT projects, which would be developed under its IRB Infrastructure Trust (Private InvIT) in a 51%-49% collaboration with an affiliate of GIC Private Limited, Singapore’s sovereign wealth fund. This, combined with the EPC margin to be earned from new projects, would substantially manage IRB’s future equity commitments. IRB has also strengthened its business profile after an equity infusion by GIC at both Private InvIT and the holding-company level, and Cintra, one of the largest private developers of transport infrastructure in the world, at the holding-company level.

Centrum Broking

Heidelberg (HEIM) reported weak set of numbers for 3QFY24 as EBITDA came in 25% below our expectation owing to sequential increase in operating costs. In spite of the increased competition in the central region, company reported decent volume growth of 10.3% YoY. However, with elections code of conduct on the verge of kicking in, we believe demand to remain subdued till 2QFY25 exerting near term pressure on volume growth. The lack of meaningful capacity addition coupled with increasing competition would likely constrain HEIM’s growth going forward. Our long term rationale remains unchanged as we expect the stock to underperform the sector owing to the absence of the long term capital allocation plan. We have tweaked our FY25/FY26 EBITDA estimates downward by 7.9%/7.8% and now bake in 5.2% revenue and 11.1% EBITDA CAGR for the company over FY23-26. We maintain our Sell rating on the stock with a revised target price of Rs167 (Rs168 earlier).

Sundaram Finance (SUF) earnings were largely in line with our estimates with healthy AUM growth (+26% YoY) and pristine asset quality, partially offset by NIM compression. AUM growth was driven by non-M&HCV segments, particularly retail CV (+56% YoY). SUF continues to be focused on product and geographic diversification strategy to sustain its growth momentum and drive margins. However, the rising cost of funds, concomitant with high competitive intensity, is likely to continue weighing in on margins. Further, loan growth is likely to taper off (AUM CAGR of ~19% during FY24E-FY26E) with a softening CV and PV industry outlook, which is evident in moderation of disbursements (+15% YoY vs. 35% in Q2FY24). While the asset quality continues to be pristine, driving healthy profitability (core RoE of ~17-18%), the 60% valuation re-rating over the past year leaves very little margin of safety. We downgrade SUF to ADD (from BUY) with a revised SoTP-based TP of INR3,610 (standalone entity at 3.7x Sep-25 ABVPS).

IDBI Capital Equity Research

Navin Fluorine International (NFIL) delivered dismal performance in the quarter. Although revenue grew by 6% sequentially, EBITDA and Adjusted PAT declined by 23% and 40% respectively. Deferrals of campaigns and inventory destocking by global agrochemical majors led to revenue decline of 5% YoY for the specialty chemicals segment. Pricing pressures in R22 exports and continuation of ramping up issues at the HFO plant impacted revenue of the HPP segment. The CDMO segment witnessed sharp revenue decline of 42% YoY owing to postponement of sales of key molecules. Subdued demand and intense pricing pressures are major headwinds which has led us to lower our PAT by 41%/34%/26%. We downgrade our rating to HOLD with a revised TP of Rs 3,120 lowering our target multiple from 38x to 35xFY26 earnings.

Rating: ACCUMULATE 

Target Price : INR 700 

Elara Securities 

Growth tepid; asset resolutions pick pace 

Topline pressures sustain, NIMs peak out, high provisions drag PAT 

LIC Housing Finance (LICHF) posted yet another soft earnings set, presided by: (a) flat NII (0.4% QoQ dip) as retail disbursements lagged with intensifying competition and continued down-trending of high-yielding wholesale book. NIMs were largely flat QoQ at 3%. (b) Technological glitches hit business traction, with flat QoQ/5% YoY loan growth. (c) Provisions were tad higher by 4% QoQ. While the management is confident of improving growth trajectory, MoM disbursement traction is still volatile and NIMs have peaked out. LICHF guided NIMs to be in the range of 2.8-3%. We expect 2.9% NIM, led by healthy liability management although growth headwinds continue to cloud earnings.

Best play on ‘Screenification’ theme 

TARGET PRICE (Rs) : 525 

We initiate coverage on Pricol with BUY and ~32% upside at 25x Dec-25E PER; we believe the stock price can potentially double in three years. Pricol’s strong market position in Driver Information Systems (DIS; ~65% revenue mix; ~50%/~70%/~90% market share in 2Ws/CVs/off-highway) with strong global and local digitization trends (democratization of TFT screens) offers an attractive play on the multi-year premiumization theme. We build-in 22%/34% revenue/EPS CAGR on sustained high growth in content/vehicle; valuations at ~18x FY26E PER (below 1x PEG) are attractive amid i) net cash-positive BS, ii) ~25% return ratios, and iii) transformation to multi-product company via expansion into adjacencies (e-cockpit, heads-up displays, telematics, BMS, disc brakes; not yet built-in) leveraging its strength in electronics/software.

Q3 FY24 Result Update: LKP Securities

The company is witnessing consistent revival in pigments volumes which is largely visible in SCIL’s performance however sequential recovery was lagging during this quarter as this is a seasonally weak quarter for the company but we expect a smart recovery in Q4FY24 as softening of the raw material prices, coupled with uptick in volumes in the domestic market has aided SCIL’s strong recovery. Despite declining prices across its product categories the company says it saw consistent signs of volume gains which helped domestic market to grow 11% YoY. We believe recent headwinds in the overall pigment industry will be transient and that shifting of global players away from pigment businesses (Top players like BASF & Clariant selling pigment biz), China +1 and sustained demand recovery will be some of the key tailwinds for the overall pigment industry and are likely to benefit SCIL as well.

(BHARTI IN, Mkt Cap USD80.3b, CMP INR1134, TP INR1310, 16% Upside, Buy)

Motilal Oswal 

- BHARTI reported a moderate growth in 3QFY24, with India Mobile EBITDA up 4% QoQ on a 2.5%/3.0% increase in ARPU/subs. Consol. EBITDA grew 1.5% QoQ. Capex remained flat QoQ and is likely to have peaked out (India capex at INR57b). As a result, deleveraging continued, with debt repayment of INR51b on the back of healthy FCF generation. 

- In the near term, BHARTI could see soft earnings growth, led by 4G-led mix benefits, but it has a limited potential for a tariff hike and may see soft market share gains. However, over the next 2-3 years, BHARTI is well poised to gain from the sector consolidation and tariff hikes and drive strong FCF generation. Retain BUY on the stock.

(VRLL IN, Mkt Cap USD0.7b, CMP INR689, TP INR820, 19% Upside, Buy)

Motilal Oswal

Network expansion to play a key role in volume growth

- VRL Logistics (VRL)’s 3QFY24 revenue grew 8% YoY/4% QoQ to ~INR7.4b (est. INR7.7b). Volumes increased 8% YoY to 1.09m tons in 3QFY24. The sluggish demand in Southern States, attributed to an unfavorable spread of the monsoon, affected volume growth. Realization per ton stood at INR 6,669 (flat YoY and QoQ). 

- EBITDA margins stood at 12.8%, against our estimate of 14.0%. The margins were adversely impacted by higher employee costs. Further, increased costs have not been passed on to customers, leading to pressure on EBITDA margins. EBITDA stood at INR944m (13% below our estimate of INR 1.08b). 

- APAT declined 64% YoY to INR 137m (vs. our estimate of INR 335m). Weak operating performance, higher depreciation, interest expense, and lower other income dragged APAT. 

- During 9MFY24, revenues grew 9% YoY to INR21.2b. EBITDA margins stood at 13.6%. APAT declined 36% YoY to INR671m. 

- Tonnage growth in 9MFY24 was adversely impacted by the slowdown in agro commodity volume in Southern states, which contribute ~40-45% to tonnage. Further, VRLL did not raise freight rates in 9MFY24 as retail diesel prices remained stable. The company is looking to increase prices post general election as fuel prices are expected to change. VRLL expects a tonnage growth of 15% in FY25 as demand picks up. We cut our FY24/FY25/FY26 EPS estimates by ~30%/18/11% to factor in lower-than-expected volume growth and margins. We expect VRL to clock a CAGR of 13%/14%/14%/16% in volume/revenue/EBITDA/PAT over FY23-26. We retain our BUY rating with a revised TP of INR820 (based on 28x FY26E EPS).

(FUSION IN, Mkt Cap USD0.7b, CMP INR585, TP INR720, 23% Upside, Buy)

Motilal Oswal

- FUSION’s 3QFY24 PAT was up 23% YoY but flat QoQ at ~INR1.26b, missing our estimate by 7% because of high credit costs. For 9MFY24, PAT grew ~37% YoY to INR3.7b.

- NII surged ~34% YoY to ~INR3.4b (in line), while PPoP jumped ~42% YoY to ~INR2.6b (in line). Net credit costs in 3QFY24 stood at ~INR940m, while annualized credit costs rose ~85bp QoQ to ~4.0%. 

- Disbursements grew 24% YoY to INR27.1b despite calibrating its growth in few geographies and halting disbursements in Punjab since Dec’23. AUM increased by ~24% YoY to ~INR107b. 

- We cut our FY24/FY25 EPS estimates by ~4%/2% to account for higher operating expenses and credit costs. We model a CAGR of 24% in AUM and 31% in PAT over FY23-FY26E, driven by strong borrower additions, operating leverage, and lower credit costs. We estimate RoA/RoE of ~5.6%/22% in FY26. FUSION currently trades at 1.3x FY26E P/BV and we believe its valuations could re-rate as it demonstrates credibility around normalization in credit costs from FY25 onwards. Maintain BUY with a TP of INR720 (based on 1.6x FY26E P/BV)

(GOAGRO IN, Mkt Cap USD1.2b, CMP INR538, TP INR525, 2% Downside, Neutral)

Motilal Oswal

Operating performance above our estimates

- GOAGRO reported a healthy operating performance (EBITDA up 17% YoY) in 3QFY24, driven by improved profitability in crop protection (EBIT up 2.9x YoY) and dairy (EBIT of ~INR102m vs. operating loss of ~INR136m in 3QFY23). The animal feed/palm oil businesses posted a muted performance, with EBIT down ~10%/15% YoY.

- The poultry and processed food business witnessed an operating loss of ~INR73m (vs. EBIT of ~INR132m in 3QFY23).

- We largely maintain our EBITDA estimates for FY24/FY25/FY26. We retain our Neutral rating on the stock with our SoTP-based TP of INR525

(TRIV IN, Mkt Cap USD1.6b, CMP INR426, TP INR540, 27% Upside, Buy)

Motilal Oswal

Triveni Turbine (TRIV)’s results were ahead of our expectations. The company reported a revenue/EBITDA/PAT growth of 33%/33%/30% YoY in 3QFY24. Order inflow growth was healthy at 28% YoY, mainly driven by exports, while domestic inflows were weak during the quarter. We remain positive on TRIV due to: 1) its market leadership position in the sub-30MW turbine market, where the inquiry pipeline is strong despite weaker domestic inflows currently, 2) the higher share of exports and aftermarket, which is resulting in a better margin profile, and 3) rising scope of API turbines. We tweak our estimates to factor in higher costs as the company enters new markets for expanding its aftermarket presence and roll forward our valuation to Mar’26E. We maintain our BUY rating with a revised TP of INR540

(FINEORG IN, Mkt Cap USD1.7b, CMP INR4496, TP INR3460, 23% Downside, Sell)

Motilal Oswal

- Fine Organics (FINEORG) reported in-line EBITDA at INR924m in 3QFY24. EBITDAM contracted 160bp YoY to 21.7%, while gross margin improved 660bp YoY to 41.8% primarily due to a sharp decline in raw material costs. In a declining input cost scenario, the company would have to pass on the benefits of the same to the customers, and therefore, we expect its margin to contract further in the coming quarter

(BATA IN, Mkt Cap USD2.2b, CMP INR1442, TP INR1480, 3% Upside, Neutral)

Motilal Oswal

- BATA’s EBITDA/PAT declined 11%/30% YoY (miss) as revenue remained flat. A gross margin improvement of 130bp YoY was offset by higher operating expenses. Store additions continued as the company added 54 new stores, with a total store count of 2,204 (including Shop-in-Shops).

- Continued softness, particularly within the value segment (<INR1,000 ASP category), remains a drag. However, steady network rollout and product revamps (including apparels and sneakers) could support growth going forward. We are factoring in a revenue/PAT CAGR of 5%/11% over FY23-25E. We reiterate our Neutral rating on the stock with a TP of INR1,480.

(AL IN, Mkt Cap USD6.4b, CMP INR180, TP INR205, 14% Upside, Buy)

Motilal Oswal 

- Ashok Leyland (AL)’s 3QFY24 results was a beat, led by savings in RM costs, which led to EBITDA margins expanding 320bp YoY to 12% (vs. est.10.5%). While volume growth is expected to remain moderate, the focus on profitable growth should aid overall margins.

- We cut FY24E/FY25E EPS estimates by 6% each to factor in demand moderation in domestic MHCV volumes. We reiterate our BUY rating with a TP of INR205 (based on 10x Mar’26E EV/EBITDA + ~INR17/sh for the NBFC)

(GPL IN, Mkt Cap USD7.7b, CMP INR2300, TP INR2855, 24% Upside, Buy)

Motilal OSwal

Delivers a consecutive quarter of record bookings

- Godrej Properties (GPL) reported the highest ever bookings of INR57b, up 76%/14% YoY/QoQ and 14% above our estimate. For 9MFY24, pre-sales stood at INR130b, up 59% YoY.

- Sales volume was flat YoY but declined 17% sequentially to 4.3msf. Blended realization too was at an all-time high, as it increased 79%/14% YoY/QoQ to ~INR13,200/sft, due to higher contributions from the premium projects

Q3 FY24 Result Update

The company posted a stellar margin growth in Q3. CV demand slowed down in Q3 on high base. However, this sector is well supported by higher influx of infra projects, mining & construction activities etc. However, on high base and Union Elections in Q1 FY 25, we see a subdued demand to continue over the next two quarters. New launches and focus on geographic mix seen in Q3 should help AL to further improve sales and fill in the gaps within the portfolio. We expect AL to gain market share in MHCVs now given its new launches, tractor trailer demand and rapid network expansion. Launch of EV truck should add to the volumes. LCV demand has been low, but with higher orders or EV LCVs, we expect FY 25 to be better.

Bus demand is robust on demand from STUs, schools and offices rising. Both bus and LCV demand shall get a further fillip with ongoing strong demand for their EV variants with AL’s EV arm SWITCH Mobility getting good orders. Defense also has been a strong segment for AL off late, with higher order inflows leading to expectations of Rs 8bn topline this year and a four digit number next year. Exports revenues, power solutions volumes and aftermarkets sales all have grown well in Q3, which should add well to the financials. On the margin front, cost cutting initiatives, lower discounting, price hikes, superior product mix along with softening input costs shall aid margin growth. To sum it up, we believe volume growth in MHCVs to fall in mid-term, while bounce back in second half of FY 25 and grow strongly in FY 26, while buses shall grow within the segment at a stronger pace. On the back of strong margin growth, we maintain BUY with a target of ₹208 (valuing at rolled over earnings of FY 26E at 17x).

Improving ARPU amid strong 4G subscriber addition 

TARGET PRICE (Rs) : 1,225 

Bharti Airtel (Airtel) reported steady operating performance for the India business. India wireless revenue increased 3.3% QoQ, with margin up 20bps QoQ to 55.1%. Revenue growth was led by strong 4G/5G subscriber addition (7.4mn in Q3 vs. 7.7mn in Q2) and postpaid customer addition of 0.7mn (1mn in Q2). ARPU rose 2.5% QoQ to Rs208. Airtel should benefit from: i) subscriber gain from Vi, with the launch of 5G; ii) mix change, as it can move users to 4G/5G from 2G; iii) expected tariff hike; and iv) historically higher pass-through of the increase in revenue to EBITDA. We raise FY25E/FY26E EBITDA by ~1% each, as we adjust for Q3 result. We increase our TP to Rs1,225/share (9.5x Dec-25E EV/EBITDA) from Rs1,125/share, as we raise our multiple for India Mobile to 9.5x from 9.0x on improving fundamentals. We retain our ADD rating

Largely steady quarter; multiple re-rating underway

TARGET PRICE (Rs) : 1,200

GOLI’s Q3FY24 volumes and EBITDA were 4-6% below our estimates, primarily due to slowdown in OEM factory-fills. However, EBITDA margin improved to 13.6%, supported by a stable cost environment. PAT rose 29% YoY and 10% QoQ to Rs807mn as core volumes grew 6% YoY to 36mn ltr in Q3, while AdBlue rose 3% QoQ. The management reiterated volume growth guidance at 2-3x of the industry, with target EBITDA margin at the higher end of 12-14% range, supported by stable input costs, branding, strategic pricing, and cost management. Dividend payout will likely be healthy. We raise FY24-26E EPS by 8-16% on better margins and assign 15x target P/E multiple (20-25% discount to Castrol’s 1-yr fwd consensus P/E), vs 11x prior (from DCF), and rolling over to Dec-25E EPS. We reiterate BUY with revised TP Rs1,200/sh (Rs750 earlier)

Though valuations are not cheap, Apeejay Surrendra Park Hotels scores on key metrics

There is not much excitement in the markets, ahead of the upcoming MPC meet. Most are expecting it to be a non-event, with traces of dovishness - similar to Dec-23. However, some key market-moving concerns continue to linger. We answer a few of the questions our clients have been asking us, covering issues such as (i) case and timings of the policy pivot and stance change, (ii) factors ahead influencing liquidity management, and (iii) of course, which part of the yield curve has maximum juice ahead. From the policy point, we see the RBI striking a dovish tone in the upcoming policy, post a healthy budget and largely comfortable global narrative, but it will fall short of any stance change (a close call). No material change in the assessment of macro variables is expected.

#1 When will the RBI pivot on rates?

We have long maintained that the RBI’s policy has been somewhat pegged to the Fed, specifically in the last two years, even as it formally targeted inflation. The swift turn of tone and action pivots of the RBI in the last two years have been influenced purely by global causes [recall a few key hawkish pivots: Ex. 1]. Amid fluid external dynamics, the policy prerogative has essentially been to ensure financial stability, even as the policy narrative has been domestic - implying the aim of financial stability may have even preceded inflation management in the last two years.

■ Can RBI Precede the Fed? We understand that shifting debates on global narratives requires the RBI to be flexible as well. Presently, a swift change in risk appetite and low volatility in risk assets has given a comfortable breathing space to EMs, including India, on offering higher risk premia. As of now, markets are assigning ~60% probability of the first Fed cut by May-24 (CY-24, 117bps cut) [Ex. 2]; and domestically, policy normalization is seen by Feb-24, with one cut each in Jun-24 and Oct-24. We think factors such as: 1) US inflation trends taking time to discern, 2) economic resilience, and 3) easier financial conditions feeding back into demand may be slowing any early move towards massive key DM central bank easing this year. This should restrain the RBI from cutting early as well. As of now, we see the Fed not cutting before Jun-24, with the RBI following suit with a lag. We maintain that the RBI will not precede the Fed in any policy reversal in CY24.

#2 What’s happening to system liquidity and consequent relevance of the RBI’s stance

The stance has been loosely linked to liquidity behavior, with the RBI changing the stance to ‘withdrawal of accommodation’ in Apr-22 and adding SDF to its liquidity management toolkit. While system liquidity stayed largely manageable in 2023, the interbank call rate stayed above the repo rate since Aug-23. Liquidity has, however, tightened significantly since mid-Dec-23 (above 1% of NDTL) [Ex. 3], with the Jan-24 deficit averaging Rs2.1trn. This has been led by (i) seasonally higher currency in circulation (CIC) - 2H behavior [Ex. 4], (ii) higher build-up in general government cash surplus amid increased spending-receipts mismatch [Ex. 5], (iii) higher C/D ratios [Ex. 6], and (iv) lesser net FX accretion via the BoP route (fading since Q2FY24 after bumper Q1). This has prompted the RBI to inject liquidity at the margin since Dec-23 via FX, while the VRR route was massively used.

■ So should there be a formal change in the stance? Given that the call money rate has been hugging MSF for the last four months [Ex. 7], technically the accommodative stance is already under the scanner. However, the recent week has seen liquidity deficit easing to sub-Rs1.5trn, with TREPs below SDF, while the RBI is now doing mild VRRRs to keep overnight rates above the repo rate. We understand the RBI would be biased to keep overnight rates more aligned towards the repo rate than MSF/SDF ahead. A part of this would be naturally achieved ahead. Our estimates suggest system liquidity deficit is likely to ease to 0.5-0.7% of NDTL in the coming months vs. 1.1-1.2% of NDTL in Jan-24, helped by the government’s cash drawdown, apart from other factors [Ex. 8]. A stance change, thus, may wait until April and will give the RBI some elbow room to understand and adjust to global dynamics.

#3 How to play the yield curve (YC) ahead?

RBI Preview: Madhavi Arora, Economist, Emkay Global

Three key questions ahead of the MPC meet

There has been massive flattening in the sovereign YC, especially in the last one month [Ex. 9], helped by lower gross borrowing announcement and fall in global yields (partly reversed now), while tighter liquidity has kept the shorter end an elusive trade. We do not expect the trend to change much going ahead, as liquidity deficit would still be above 0.5% of NDTL and could help ease shorter tenor yields only at the margin, while the longer tenor may stay favorable, led by better demand-supply dynamics and lower inflation prints ahead. We think ‘playing the steepener’ can easily wait till summer.

Here’s an interesting stock idea; check out the latest bl.Today’s Pick episode to learn more.

Dr Reddy’s Laboratories stock found support at ₹5,600 three weeks ago. It bounced off this level and has been gaining since then. After surpassing the resistance at ₹6,000 last week, the stock went to consolidation phase. That is, it has been oscillating between ₹6,000 and ₹6,130. But on Tuesday, it broke out of this range, opening the door for further upside.

The market capitalisation of the Tata Group, comprising 18 firms, crossed ₹30 lakh crore intra-day on Tuesday.

More than half of the group’s market value is contributed by Tata Consultancy Services. The shares of the software bellwether rose 3.9 per cent to ₹4,129 on the NSE on Tuesday, taking its m-cap past the ₹15 lakh crore mark for the first time.

The company signed a deal to transform Europ Assistance’s IT operating model using artificial intelligence and machine learning on Monday. The shares are up 8.3 per cent year-to-date.

Asian stocks surged as investors bet on China’s increased market intervention and shrugged off cautious remarks from Federal Reserve officials. Japanese stocks traded flat with a positive bias on Wednesday, with investors anticipating corporate earnings reports. The benchmark Nikkei 225 index rose by 0.08 per cent, or 31.17 points, to 36,191.83 in early trade, while the broader Topix index traded higher by 0.72 per cent, or 18.22 points, reaching 2,557.47. 

Equities in South Korea’s KOSPI index strengthened, gaining 1.49 per cent or 38.44 points to 2,614.64, while Australia’s S&P/ASX 200 opened 0.59 per cent higher, adding 44.60 points to reach 7,626.20.

Meanwhile, Wall Street saw slight gains on Tuesday, with the S&P 500 rising by 11.42 points, or 0.2 per cent, to 4,954.23, nearly reaching its all-time high set at the end of last week. The Dow Jones Industrial Average gained 141.24 points, or 0.4 per cent, to 38,521.36, while the Nasdaq composite edged up by 11.32 points, or 0.1 per cent, to 15,609.00.

Here are the intraday supports and resistances for widely traded stocks such as Reliance Industries, ITC, ONGC, Infosys, HDFC Bank, TCS and SBI