Short Call | Will January’s seasonality bring dark clouds over the market? Jindal Steel, Vodafone Idea in focus

Short Call

As the calendar flips to 2025, the Indian market is giving off "new year, same old blues" vibes. After wrapping up December 2024 with a 2% decline, January comes packed with significant events that could steer market sentiment. Trump 2.0 taking charge in the US, the Q3 earnings season and the buzz around the Union Budget, will be shaping up the market trajectory of January.

However, January comes with its own touch of seasonality, one that is not so welcoming. Over the past decade, the Nifty has ended January in the red seven out of ten times. And if history repeats itself, those growling bears might have their way again.

Adding to the weight is the persistent selling pressure from Foreign Institutional Investors (FIIs) in recent months, apart from a brief pause in early December. That trend also gains an upper hand in January’s seasonality, as FIIs have remained net sellers six times between 2015 and 2024.

But that’s not all, uncertainty around the policies that Trump’s incoming government may take is also keeping investors jittery. Lastly, adding the cherry on top is expectations of yet another quarter of subdued earnings growth for India Inc.

Now while a new year does present an opportunity for a fresh start, the current backdrop suggests that January’s seasonality may win the game this time around.

Vodafone Idea (Rs 7.94, +2%)

Stock rose after the government approved a waiver for requirement of bank guarantees for spectrum acquired by telecom operators in previous auctions.

Bull case: Citi noted that the latest development brings major relief to Vodafone Idea, as its inability to provide bank guarantees had been a key obstacle in securing debt funding from banks.

Bear case: Despite its recent capital raise, the company continues to lose customers due to the late rollout and inconsistent rollout of 5G which will add pressure to its revival.

Jindal Steel and Power ( Rs 930, +1.20%)

Shares rose after Nuvama issued "buy" rating with target at Rs 1,292.

Bull case: JSPL's resolution of its pellet plant bottleneck could significantly ramp up steel production, potentially reaching 8.3 million tons by FY26, while government capex initiatives and higher steel prices in Q4FY25 offer strong growth prospects.

Bear case: Despite promising Q4FY25, the company's revised EBITDA forecasts for FY25/26 reflect concerns over lower volumes, which could dampen overall performance and growth momentum in the near term.

(Inputs from Lovisha and Vaibhavi)