Short Call: Retail investors fuel climate change in markets; Trent, IndiaMart, Tata Consumer, Ajanta Pharma in limelight

Higher taxes in the Budget have not dampened sentiment in any way, with a notable 31 new listings on Dalal Street in July alone.

India's primary market has been nothing short of a juggernaut this year, with over 150 companies amassing nearly $5 billion through IPOs between January and July—almost double the amount raised during the same period last year, according to LSEG data. Higher taxes in the Budget have not dampened sentiment in any way, with a notable 31 new listings on Dalal Street in July alone.

These listings, mostly in the SME segment, have dazzled investors, with around 50 percent still enjoying nearly 100 percent gains. In this backdrop, the excitement surrounding Ola Electric's IPO, set to open for bidding on August 2, is palpable.

Some of the high-profile IPOs in the recent past, particularly from new-age businesses, have turned out to be damp squibs. That may be no dampener for the new set of investors who flock to the market every day, who only know one thing: the market is making new highs.

Veterans have repeatedly caution that valuations across most sectors—excluding Financials and IT—appear inflated. But one can’t blame retail investors alone. Foreign investors who were griping about expensive valuations till just before the general elections results, too have had a change of heart. It seems to be a capital market of climate change as liquidity continues to swamp fundamentals

Ajanta Pharma (Rs 2,687.50, +6.2%)

Q1FY25 net profit, revenue and beat Street estimates

Bull Case: Diversified business model across branded markets in India, Africa, and Asia, coupled with strong generics presence in the US. This ensures robust earnings growth and sustainability, driven by 75 percent revenue from branded business.

Bear Case: Faces significant risks including delays in regulatory approvals, currency fluctuations, and potential USFDA inspection issues, which could negatively impact its earnings and growth prospects across its diverse market segments.

Tata Consumer Products (Rs 1,188, Flat)

Q1 profits dip.

Bull Case: Strong distribution network, which can be expanded further. A recovering rural sector and a thrust on premiumisation can boost demand for products.

Bear Case: Soaring commodity prices, such as tea and coffee, can impact margins. Lack of correctly timed pricing actions can cause competition to take over market share. NourishCo segment could continue to lag.

IndiaMART InterMESH (Rs 2,944, -6.6%)

Added 1,500 new suppliers in Q1, missing expectations

Bull Case: Management confident of gaining medium-term demand momentum. Long-term outlook on revenue growth momentum remains strong. Long-term contracts from world's leading brands boost revenue visibility. Broad-based vertical growth.

Bear Case: Rising competition may reduce market share and impact revenue potential. Rising employee and other operating costs may impact operating margins negatively.

Trent (Rs 5,849, +4.1%)

Stock up 12% in 8 days

Bull case: The Tata-group company is expected to see up to $429 million inflows if it is included in Nifty 50 September reshuffle, suggested analysts at Nuvama Alternative.

Bear case: Any muted demand or decline in disposable income of consumers due to rising inflation can impact the stock. Delayed expansion of Westside or Zudio stores can also contribute towards negative sentiment of the stock.

(With Inputs from Zoya, Neeshita, and Lovisha)