KEY ECONOMIC INDICATORS
WORLD ECONOMIC INDICATORS
Stocks
|
Change
|
---|---|
🇮🇳 Nifty 50
|
- 0.59%
|
🇮🇳 Sensex
|
- 0.68%
|
🇮🇳 India VIX
|
+ 0.74%
|
🇺🇸 S&P 500
|
+ 0.16%
|
🇺🇸 Nasdaq
|
- 0.06%
|
🇺🇸 Dow Jones
|
+ 0.25%
|
🇪🇺 Euro Stoxx
|
- 0.43%
|
🇨🇳 China A50
|
- 0.59%
|
🇨🇳 DJ Shanghai
|
- 0.26%
|
🇬🇧 FTSE 100
|
+ 0.83%
|
🇯🇵 Nikkei 225
|
- 0.87%
|
🇮🇩 IDX Composite
|
- 0.22%
|
🇸🇦 Tadawul All Share
|
+ 0.07%
|
TOP GAINERS ON THE INDIAN STOCK MARKET
Stocks
|
Change
|
---|---|
Nestle India
|
+ 1.87%
|
Hindustan Unilever
|
+ 1.50%
|
Mahindra & Mahindra
|
+ 1.38%
|
Kotak Mahindra
|
+ 1.26%
|
Asian Paints
|
+ 0.69%
|
TOP LOSERS ON INDIAN STOCK MARKET
Stocks
|
Change
|
---|---|
Tata Steel
|
- 2.07%
|
Larsen & Toubro
|
- 1.88%
|
Tata Motors
|
- 1.86%
|
Tata Consultancy
|
- 1.72%
|
Wipro
|
- 1.71%
|
NEWS
Manappuram Finance finds its rhythm
Manappuram Finance got a solid boost on Thursday morning, climbing 6% after the RBI finally lifted loan restrictions on its microfinance arm, Asirvad Micro Finance. Investors cheered the news, pushing the stock up to ₹191.50 intraday—a clean 6% rise from its prior close of ₹180.05. The stock has seen its fair share of ups and downs, losing ground since its ₹230.05 peak. But don’t write it off just yet—it’s up over 32% since its October low of ₹138.40, showing some serious resilience. The lifting of RBI’s October 2024 sanctions, which had frozen Asirvad’s loan activities, is a major relief. With these curbs now a thing of the past, Manappuram’s Q4 could tell a brighter story when results roll out. Analysts had slashed earnings estimates for FY25 and FY26 by nearly 19% and 12%, citing regulatory hiccups and sector struggles. But with this regulatory hurdle cleared, there’s hope for a rebound. Elara Securities remains cautiously optimistic, keeping an “Accumulate” rating on the table. While the stock has taken a beating, it seems the correction is already priced in, setting the stage for a potential comeback. The market’s reaction today suggests investors are betting on a turnaround, and with fundamentals potentially improving, Manappuram’s story isn’t over yet.
Mixed Signals for the Indian Auto Sector
The festive season did little to shift the gears for India’s automobile sector in Q3 FY25, with a muted 6% YoY volume growth that left analysts scratching their heads. While the Passenger Vehicle (PV) segment rode the festive wave, two-wheelers stalled, and commercial vehicles continued to struggle. On the brighter side, tractors bucked the trend, showing solid recovery and hinting at improving rural sentiment. The slowdown in two-wheelers is particularly striking, given the segment’s strong run in the first half of FY25. Domestic sales flatlined in Q3 compared to a 15% growth earlier, though export markets like Africa offered a glimmer of hope. Several key players saw earnings downgrades, reflecting the tepid demand outlook. Bajaj Auto, Tata Motors, and Ashok Leyland faced cuts of 13%, 6%, and 7%, respectively. Even ancillary giants like Sona BLW and Motherson Sumi took hits. Despite this cautious backdrop, analysts see promise in Maruti Suzuki and Hyundai. Maruti’s upcoming launches and Hyundai’s alignment with UV trends position them for potential growth. For Maruti Suzuki, strong volumes could deliver a 16% YoY revenue growth, but higher discounts might squeeze margins. Tata Motors, buoyed by Jaguar Land Rover and India PV growth, is expected to post a 9% rise in net profit with improving margins.
TCS Declares Special Dividend and Posts Double-Digit Profit Growth in Q3
Tata Consultancy Services (TCS), India’s IT bellwether, made waves on January 9 with its third interim dividend announcement, sweetened by a generous special dividend. Shareholders are set to receive ₹10 per equity share as an interim dividend and an additional ₹66 per share as a special dividend, both on shares with a face value of ₹1 each. The payout will hit accounts on February 3, 2025, for those listed in the company records by January 17. TCS unveiled its financial results for the October-December quarter after market hours on Thursday, revealing a 12% year-on-year rise in net profit, reaching ₹12,380 crore, compared to ₹11,058 crore in the same period last year. Revenue from operations climbed 5% to ₹63,973 crore, up from ₹60,583 crore a year earlier. The Communication, Media, and Technology (CMT) segment emerged as the star performer, with revenue surging 20% to ₹11,989 crore, marking a sharp contrast to its previous ₹9,932 crore. The BFSI (Banking, Financial Services, and Insurance) segment, a critical revenue driver for TCS, posted a steadier 3.6% growth to ₹23,481 crore, compared to ₹22,667 crore in the preceding quarter. Despite the positive results, the market appeared unimpressed, as TCS shares slipped 1.72% to ₹4,036.65 by the close of Thursday’s trading session. Investors might be weighing the broader implications of a global slowdown in IT spending, even as TCS continues to deliver stable growth.
ACME Solar Powers Ahead with New Capacity in Rajasthan
ACME Solar Holdings Ltd is basking in the spotlight as its shares surged nearly 5%, following the commissioning of an additional 90 MW of solar capacity in Rajasthan. This latest achievement pushes the company’s total operational renewable generation capacity to an impressive 2,453 MW, reinforcing its position as a key player in India’s green energy push. This follows the December 2024 announcement of 1,023.05 MW of solar projects coming online, demonstrating the company’s steady march towards renewable energy leadership. To add to the momentum, ACME secured ₹1,988 crore in financing from Power Finance Corporation for a 300 MW solar-wind hybrid project, blending solar capacity in Bikaner with wind energy from Bhuj. Expected to go live by June 2025, this hybrid project already has a power purchase agreement with NTPC, signaling strong commercial viability. On the market front, ACME shares hit a day’s high of ₹241.00, up 4.8%, signaling growing investor optimism. Although the stock remains 17% below its all-time high of ₹292.00 from December 2024, it has rebounded 7.5% from a 52-week low of ₹224.00, logged in late December. Despite being listed at a 13% discount to its IPO price of ₹289 in November 2024, the company’s consistent project execution and financial discipline are gradually reshaping market sentiment.
IndiaMART Sees a Turnaround as JM Financial Upgrades Stock to Buy
IndiaMART InterMESH is finally catching a break after enduring a rough four-month stretch, with its stock plunging 22%. Brokerage JM Financial has shifted gears, upgrading the stock from Sell to Buy. The shift comes as the firm sees potential in the platform’s long-term growth despite recent setbacks, including sluggish collections and weak paying supplier additions. JM Financial points to a sharp deceleration in collections growth, just 5% year-on-year in Q2FY25, and six quarters of muted supplier additions as the primary reasons for the stock’s earlier downturn. While Q3FY25 metrics are unlikely to show dramatic improvement, the brokerage anticipates a recovery in standalone collections growth, expecting low-teens growth in the medium term. Meanwhile, EBITDA margins are projected to remain robust at 34-36%, thanks to minimal growth-related investments. The firm acknowledges ongoing challenges in paying supplier growth, a key metric that has struggled since Q1FY24. Despite these hurdles, deferred revenue should push overall revenue growth to 15.5% year-on-year in Q3FY25, offsetting lackluster collections. On the cost side, reductions in sales incentives and servicing costs could provide a boost, with EBITDA margins projected to climb by eight percentage points year-on-year and consolidated EBITDA expected to expand by a robust 50%. Looking further ahead, JM Financial forecasts collections growth stabilizing in the low-to-mid teens, down from the platform’s historical CAGR of over 20%.
HSBC Downgrades Indian Equities Amid Growth Concerns and High Valuations
Global brokerage HSBC has turned cautious on Indian equities, downgrading its stance from Overweight to Neutral amid concerns over steep valuations and slowing growth momentum. The revised outlook reflects expectations of muted near-term market gains, with HSBC lowering its Sensex target for the end of 2025 to 85,990—down from the earlier projection of 90,520. This still represents a modest 10% upside from the January 8 closing level of 78,148.49. HSBC’s tempered optimism comes as India’s robust earnings growth story faces a reality check. After years of annualized earnings growth of around 25%, the pace has decelerated sharply, prompting the brokerage to slash its FY25 Nifty 50 earnings growth forecast from 15% to a mere 5%. HSBC cited potential downside risks to growth, compounded by a cyclical slowdown and recalibration of high earnings multiples. The Indian stock market has seen a significant pullback since peaking in September 2024, with the FTSE India Index down 12% in USD terms and benchmark indices Sensex and Nifty 50 falling about 10% from their record highs. This correction follows nine consecutive years of annual gains, with foreign investors retreating from richly valued stocks as earnings disappoint. Since September 2024, foreign fund outflows have totaled $12 billion, although resilient domestic demand has helped cushion the blow. HSBC’s downgrade is not a rejection of India’s long-term potential but rather a reflection of its cautious near-term view.
Foreign Investors Return to Selling Indian Equities Amid Mounting Concerns
After a brief respite in December, foreign portfolio investors (FPIs) have resumed their selling spree in January, shedding nearly ₹12,000 crore worth of Indian stocks so far. The shift in sentiment isn’t entirely new. FPIs had been net sellers during October and November, pulling out close to ₹1.60 lakh crore before turning net buyers in December. However, even in December, the enthusiasm faded quickly, as intensified selling in the latter half led to a 2% drop in the Nifty 50 index. This persistent selling pressure has taken a toll on FPI ownership in Indian equities, which slipped to 16.1% in December 2024—a 12-year low—down from 16.8% in the same period a year earlier. The total Equity Assets Under Custody (AUC) held by FPIs fell to ₹71.1 trillion in December, compared to ₹71.9 trillion in November, per a JM Financial report. The January selloff appears to be driven by a mix of factors. Concerns about the HMVP virus and lackluster earnings updates for the December quarter have dampened investor sentiment. Global cues are also adding pressure. A dollar index at 109 and a U.S. 10-year bond yield hovering around 4.67% have made Indian equities less appealing to foreign investors. Market volatility is expected to persist as investors digest Q3 results, await Union Budget announcements, and keep an eye on potential policy shifts in the U.S. While the long-term fundamentals of the Indian economy remain solid, the immediate outlook appears clouded by uncertainties that could keep foreign investors on edge.
Adani Wilmar Set to Make Waves with Promoter Stake Sale Announcement
Adani Wilmar is poised to grab market attention as its promoter, Adani Commodities, has unveiled plans to offload a 13.5% stake through an Offer For Sale (OFS). This base issue size, amounting to 17.54 crore shares, was announced late Thursday evening in a regulatory filing. In addition, the company has reserved the option to exercise a green shoe mechanism, potentially increasing the stake sale by another 6.5%. The OFS price has been pegged at ₹275 per share, offering a 15% discount to the stock’s closing price on Thursday. The sale will open to non-retail investors on Friday, January 10, with retail investors gaining access on Monday, January 13. This move aligns with broader restructuring efforts within the Adani Group. Last month, Adani Enterprises, the conglomerate’s flagship entity, revealed plans to exit its joint venture in Adani Wilmar. The strategy includes selling a 13% stake to meet minimum public shareholding norms, while Wilmar International—the co-promoter—agreed to acquire the remaining 31%. The Adani Enterprises’ portion of the holding is valued at an estimated ₹18,500 crore, or over $2 billion, based on current valuations.
OVERVIEW
Indian stock markets stumbled again on Thursday, January 9, with the Nifty closing down 0.69% and the Sensex slipping 0.68%. The Nifty 50, peaking at 23,689.5, dropped as low as 23,503.05, closing off 162 points. The Sensex mirrored that trend, opening at 78,206.21 before plunging over 600 points to 77,542.92. It closed 528 points lower, reflecting a broader weakness that also saw mid and small-cap stocks take a harder hit. The Nifty Midcap 50 sank 0.75%, while the Nifty Small Cap 100 lost 1.35%. These declines are compounded by a sharp drop in market capitalization, which has shed about ₹6 lakh crore in just two days.
Why the downward spiral? Several factors are at play here: foreign investors are pulling out capital, rising US bond yields are making the dollar stronger, and the rupee’s fall isn’t helping either. Meanwhile, global market sentiment isn’t looking too bright, especially with some Asian markets dragging down sentiment. For sectors, it’s a rough ride across the board—except FMCG, which saw a modest gain. Realty, Oil & Gas, IT, and Banking stocks all came under pressure, pulling the broader market deeper into the red.
In the commodities world, gold showed a small uptick, with 24 carat gold rising by ₹130 to ₹7,900 per gram. Meanwhile, silver took a step back, falling by ₹200 to ₹95,500 per kg. Oil prices were stable despite worries about a stronger dollar and the looming US fuel inventories. Brent crude dropped slightly, closing at $76.13 per barrel.
Looking ahead, traders are on edge, awaiting the earnings reports starting with TCS on January 9. While the numbers are expected to show improvement over the last couple of quarters, the market isn’t holding its breath for anything extraordinary. The rising US dollar and bond yields remain a dominant threat, pressuring emerging markets like India, as foreign funds continue to flow out. Investors are also eyeing US interest rate movements and how they will affect global liquidity.
At the same time, the international bond market is seeing significant shifts, especially in the UK. A sharp rise in British bond yields this week has analysts worried about a growing crisis in the UK’s fiscal outlook, further adding to global market uncertainty.
In short, the mood is cautious, with traders bracing for a bumpy ride, especially as geopolitical and economic issues continue to cloud the horizon.