Short Call: Real estate may gain on RBI's neutral stance, war could hurt FMCG; GMR Airports, TCS in focus

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After a stellar 70 percent rally over the past year, realty stocks could brace for further gains, allaying concerns over high valuations. The Reserve Bank of India's decision to hold the repo rate steady at 6.5 percent and shift to a neutral stance suggests a potential rate cut in December, which could further fuel the real estate market.

With the festive season approaching, housing demand is surging, and developers are optimistic about achieving new sales milestones. Experts believe stable loan rates will broaden the pool of potential homebuyers, strengthening growth momentum, particularly for first-time buyers and expansion-driven developers.

On the other hand, FMCG shares may move sideways. This comes after MPC acknowledges that unseasonal rains and geopolitical events have increased volatility in commodity prices and that there is a need for close monitoring. Commodity prices are also rising given the escalating tensions in the Middle East.

GMR Infra (Rs 88.70, +1.2%)

Shares rose on Jefferies initiation with ‘buy’ call.

Bull case: Concession agreement to develop airport in Nagpur offers a geographic advantage, writes Jefferies. The venture to trigger a stronger growth trajectory in the future. Also, GMR is evolving from utility to a retail consumption play and is slated to benefit from the strong air traffic growth outlook, and travel retail opportunity, Jefferies feels.

Bear Case: Major execution risks as it takes up a new project to build an airport in Nagpur, can fuel a spike in debt and pressure on margins.

Tata Consultancy Services (Rs 4,228, -0.59%)

TCS reported muted earnings for Q2FY25. However, BSNL ramp-up continues to fuel growth

Bull Case: The company is positioned for future growth, driven by the ramp-up of the BSNL deal and a strong deal pipeline. The recovery in BFSI and post-wage hike margin improvements signal positive momentum, with large deal wins expected to support revenue growth and overall performance in FY25.

Bear Case: The company faces near-term challenges with margin contraction due to higher third-party expenses and slower growth in North America. A sluggish demand recovery and client-specific issues have led to revenue stagnation, with EPS cuts signalling potential earnings weakness and a cautious outlook for margins.

(Inputs from Vaibhavi and Harshita)