Closing Bell: Sensex, Nifty end flat on expiry day; auto, oil & gas, media gain

Indian benchmark indices ended flat in the volatile session on July 25. At close, the Sensex was down 109.08 points or 0.14 percent at 80,039.80, and the Nifty was down 7.40 points or 0.03 percent at 24,406.10.

We wrap up today's edition of the Moneycontrol live market blog, and will be back tomorrow morning with all the latest updates and alerts. Please visit https://www.moneycontrol.com/markets/global-indices for all the global market action.

Markets remained volatile on the monthly expiry day and ended nearly flat, continuing the current consolidation trend. Weak global cues and pressure on major banking stocks led to a gap-down start, but recovery in select heavyweights minimized losses. Ultimately, Nifty closed at 24,406.10. Sector-wise, energy, auto, and pharma performed well despite the choppiness, while metal and banking sectors ended lower. The broader indices remained almost unchanged.

Markets are showing significant resilience during this consolidation phase, so we continue to recommend looking for buying opportunities on dips as long as Nifty holds above the 24,200 level. Given the mixed trends across sectors, it is crucial to focus on stock selection. In addition to earnings reports, the performance of global indices, especially in the US, will be closely watched for further cues.

Overnight slump in US equities caused a major slump in domestic markets in early trades due to heavy profit-taking in banking, IT, metals and realty stocks. However, markets recouped most of its losses towards the end with Sensex managing to close above the crucial 80k-mark amid buying in oil & gas and automobile stocks, indicating that investors are willing to bet on good fundamental sectoral stocks despite rising concerns of the stretched valuations of the Indian markets.

After a volatile session, the Indian market concluded on a flat note, influenced by lower-than-expected earnings growth from major banks. Global indices also reacted pessimistically due to the disappointing results from top US tech companies. However, the government's commitment to improving consumption and bridging the gap for energy transition in the budget buoyed sectoral sentiments. Despite ongoing enthusiasm from retail investors in the broader market, the current high valuations are likely to prompt a shift towards large-cap stocks.

Following weak global equities, Indian markets started the monthly expiry day on a tepid note with a loss of over 150 points. But, after a sharp cut, one-way recovery was seen throughout the day which supported the Index limiting its losses to 7.40 points to end the session at 24,406.10.

Among the sectors, auto was the biggest gainer followed by energy while metal and realty corrected the most.

Mid and Smallcaps recovered from their morning lows but underperformed the Benchmark Index.

As we are constantly mentioning that the level of 24,200 is a strong support and as long as the Index holds it, the uptrend will remain intact. On the flip side, a level of 24,560 is considered an immediate hurdle.

Indian rupee ended flat at 83.70 per dollar on Thursday against Wednesday's close of 83.71.

Indian benchmark indices ended flat in the volatile session on July 25.

At close, the Sensex was down 109.08 points or 0.14 percent at 80,039.80, and the Nifty was down 7.40 points or 0.03 percent at 24,406.10. About 1791 shares advanced, 1635 shares declined, and 77 shares unchanged.

Top Nifty gainers included Tata Motors, ONGC, SBI Life Insurance, BPCL and Sun Pharma, while losers were Axis Bank, Nestle India, Titan Company, ICICI Bank and Tata Steel.

On the sectoral front, auto, capital goods, power, oil & gas, healthcare, media rose 0.5-3 percent, while bank, IT, metal, realty and telecom shed 0.5-1 percent.

The BSE midcap and smallcap indices ended marginally lower.

#1 Q1 revenue growth of 8 percent YoY with 3 percent YoY volume growth was a good performance

#2 Double-digit revenue growth in P&A segment while popular segment declined by 3 percent YoY

#3 Premiumisation trend continued though at a moderate level

#4 Management maintained its guidance of double-digit revenue growth in FY25

#5 Management guided H2FY25 growth to be better than H1FY25

#6 H2FY25 growth to be driven by improvement in demand environment, scale-up of renovations and innovations

#7 Underlying gross and operating margins saw a strong expansion led by cost savings

#1 Q1 results showed stable quarter

#2 Q1 total/individual APE growth of 20 percent/23 percent YoY versus 17 percent/9 percent in Q4

#3 For comparison, total APE growth for ICICI Pru/HDFC Life was higher at 34 percent/23 percent YoY

#4 VNB margin declined nearly 210 bps YoY, leading to lower VNB growth of 12 percent YoY

#1 Robust Q1 above estimate results on higher volumes & margin

#2 Q1 EBITDA of Rs 156 crore increased a sharp 47 percent QoQ & 29 percent above estimates

#3 Reported margin on spot volumes jumped to USD 7.4/mmBtu versus estimate of USD 2.3/mmBtu

#4 Spot margin was still above estimates at USD 3/MmBtu

#5 Dahej terminal expansion project on track to complete in FY25

#6 Raise FY25F/26 EPS by 5 percent/8 percent

Indian Rupee appreciated slightly on supposed intervention by the Reserve Bank of India (RBI) and overall weakness in crude oil prices. A decline in the US Dollar index also favoured the Rupee. Rupee fell to a record low earlier in the day on weak domestic markets and FII outflows over the past two days.

We expect Rupee to trade with a slight negative bias on a weak global markets and fresh FII outflows. However, weak US Dollar and declining crude oil prices may support the Rupee at lower levels. Intervention by the RBI may also support the Rupee.

Traders may take cues from US GDP, durable goods orders and weekly unemployment claims data from the US. USDINR spot price is expected to trade in a range of Rs 83.45 to Rs 84.

#1 Net profit at Rs5.9 cr vs Rs0.2 cr (YoY)

#2 Revenue up 6.3% at Rs653 cr vs Rs614.3 cr (YoY)

#3 EBITDA up 25.7% at Rs105.5 cr vs Rs83.9 cr (YoY)

#4 Margin at 16.2% vs 13.6% (YoY)

#1 Q1 profit of 24 percent above estimate on large inventory gain & higher-than-expected other income

#2 Volumes at both Dahej & Kochi missed but higher trading gains resulted in an in-line EBITDA

#3 LNG consumption in Q1 rose 27 percent QoQ, led by jump in heatwave-driven demand

#4 Post Q1, gas demand from the power sector has come off notably

#5 Even inventory gains could see reversal if international gas prices see a cool-off hereon

#6 With this seasonal peak in LNG demand behind, Q1 may prove to be interim peak in volume & profit

#1 Profit plunges 54.7 percent to Rs 139.7 crore Vs Rs 308.7 crore

#2 Revenue rises 8.2 percent to Rs 1,713.7 crore Vs Rs 1,584.4 crore

The United States Food and Drug Administration (US FDA) has conducted surprise inspection of the Company’s Dundigal Facility at Hyderabad for Good Manufacturing Practices (GMP) between 22nd July, 2024 and 25th July, 2024.

The inspection was concluded with two 483 Observations. These observations are procedural in nature.

The corrective and preventive actions for these observations will be submitted to the US FDA within the stipulated period. The observations issued are neither repeated observations nor related to data integrity.

#1 Profit increases 3.5 percent to Rs 131.4 crore Vs Rs 126.9 crore, YoY

#2 Net interest income grows 5.5 percent to Rs 496.6 crore Vs Rs 470.7 crore, YoY

#3 Gross NPA jumps to 3.33 percent Vs 3.23 percent, QoQ

#4 Net NPA rises to 1.18 percent Vs 1.11 percent, QoQ

#1 Profit jumps 27.7 percent to Rs 235.7 crore Vs Rs 184.6 crore, YoY

#2 Revenue rises 24.3 percent to Rs 386.6 crore Vs Rs 311.2 crore, YoY

#1 Profit declines 20.9 percent to Rs 1,337.9 crore Vs Rs 1,691.8 crore, YoY

#2 Revenue rises 8.2 percent to Rs 13,617.8 crore Vs Rs 12,588.3 crore, YoY

Axis Bank on July 24 reported a net profit of Rs 6,035 crore for Q1 FY25, up from Rs 3,452 crore in the corresponding quarter previous year. This beat street expectations. An average estimate of 8 brokerages had expected a net profit of Rs 5,797 crore.

On a sequential basis, the profit of the bank dropped by 15 percent from Rs 7,130 crore.

With consistent improvements in gross and EBITDA margin, increase FY25/FY26 EPS estimates by 3%/4%

Company sold a large part of its popular portfolio to concentrate on its global strategy for the premium portfolio.

The liquor industry is currently experiencing an upgrading trend, aligning well with company's renewed emphasis on P&A, which fits into the long-term liquor upgrading narrative in India.

Maintain Neutral rating on the stock. Target Price of Rs 1,400.

#1 Q1 results showed company had a weak start to fiscal with sustained agrochemical uncertainty

#2 Q1 showed intensifying competitive pressures

#3 Structural changes to refrigerant gas consumption patterns implies more bumpiness

#4 Specialty chemicals guidance unchanged, but not without downside risks

#5 Traction witnessed in recent launches, legacy products not out of the woods

#6 Customer sentiment across specialty chemicals remains subdued

The company informed that the implementation of setting up of Weaving manufacturing unit and Expansion of Denim Division at B-24 to B-41, Industrial Area, Jhanjharwada, Neemuch, Madhya Pradesh has been completed and the commercial production of the said unit has commenced.

#1 Profit grows 4.9 percent to Rs 401.5 crore Vs Rs 382.8 crore, QoQ

#2 Revenue falls 2.1 percent to Rs 3,520.6 crore Vs Rs 3,596.8 crore, QoQ

#1 Q1 standalone EBITDA slightly above estimate but missed consensus

#2 Q1 volumes were higher than expected

#3 Adjusted for volumes, EBITDA was lower than estimates

#4 Realisations were weaker, partially offset by better show on ‘other’ opex

#5 Some postponement in project execution timelines – execution is key

The pharma company has transferred 49% of its equity share capital in the joint venture company, Dr Reddy’s and Nestle Health Science, to Nestle India. After the transfer, Dr Reddy’s Labs holds 51% of the share capital, while Nestle India holds 49% of the share capital in the joint venture company.

Despite valuations being slightly on the expensive side, Sanstar received a healthy response on the last day of the issue from all types of investors. We believe the investor demand has come considering an opportunity to invest in one of the leading Indian manufacturers of plant-based specialty products and ingredients derived from maize. We also believe there are high entry barriers in the maize-based specialty products industry and the B2B nature of their business create significant exit barriers for customers, ensuring a stable and loyal customer base.

Considering healthy subscription demand and unique business matrix, we expect a decent room for listing gain in the range of ~22-25% against the issue price of Rs 95 per share while looking at market mood post budget, we recommend allotted investors to book profits on listing day.

Indian market sentiment initially soured on budget day due to a proposed hike in capital gains tax. Now, sentiments have worsened further following a sharp global market downturn, highlighted by Nasdaq's 3.64% plunge, resulting in a significant gap-down opening today.

As of today’s monthly expiry, the Nifty is trading below its monthly Volume Weighted Average Price (VWAP) levels of 24400, indicating a negative bias. We expect the Nifty to potentially test support levels around 24300 to 24150. Meanwhile, the Bank Nifty has continued to underperform compared to the Nifty, primarily due to selling pressure in the private banking sector. Given the current high volatility, it would be wise to adopt a cautious approach and wait for clearer market signals before making any trading decisions.

The company received the warning letter from the US FDA for its Dadra facility on June 19. There is no impact on the company's financial, operational, or other activities. Sun Pharma will work with the US FDA and undertake all necessary steps to resolve the outstanding issues.

#1 Geogit initiated coverage on Suzlong Energy

#2 Ups target price to Rs 73, up 20% from CMP

#1 Nestle India's Commodity Outlook: Commodity prices are seeing unprecedented headwinds in coffee and cocoa with all-time high prices and an ongoing price rally. Cereals and grains are going through a structural cost increase backed by MSP. There is relative stability in milk prices, packaging and edible oils.

#2 Nestle India E-commerce: Continued to accelerate, with strong growth in quick commerce, driven by brands such as KITKAT, NESCAFÉ, MAGGI Masala-ae-Magic, MILKMAID and RTD

#3 E-commerce sustained its upward trajectory, contributing to 7.5% of domestic sales and growing

at double digit

The company has received board approval for raising funds up to Rs 1,000 crore via equity shares or bonds, in one or more tranches. The board also approved the incorporation of a subsidiary in India to undertake the business of distributing products and services through a robust digital platform.

H.G. Infra Engineering has been declared as L-1 bidder by the Ministry of Road Transport and Highways (MORTH) for the project of improvement and up-gradation in two lane with paved shoulders configuration of newly declared NH227B Bahuvan Madar Majha to Jagarnathpur (Design Km 160.200 to Km 224.040) “84 Kosi Parikrama Marg” in the State of Uttar Pradesh on Hybrid Annuity Mode Package V. The bid cost of the project is Rs 763.11 crore.

The company reported a decent performance during the quarter, with APE and VNB in line with estimates (VNB margin contracted to 26.8% in 1QFY25).

New product launches are likely to kick-start the recovery in the protection segment.

Further, the impact of surrender charges is likely to be minimal.

Considering the seasonality, the SBI channel is anticipated to see recovery in growth in 2Q and 3Q.

SBILIFE continues to maintain its cost leadership and expect SBILIFE to deliver an 18% CAGR in APE/VNB over FY24-26, while RoEV is projected to remain ~20%.

Subsidiary ITC Infotech India has incorporated a wholly owned subsidiary in Italy under the name ITC Infotech Italia s.r.l.

The company has received a Letter of Acceptance from SER HQ-Electrical/South Eastern Railway for a project worth Rs 191.53 crore.

The project involves the design, supply, erection, testing, and commissioning of a 132 KV traction substation, sectioning posts (SPs), and sub-sectioning posts (SSPs) in a 2x25KV system on the Rajkhaswan-Nayagarh-Bolani section of the Chakradharpur division of South Eastern Railway.

#1 Profit grows 8 percent to Rs 400.3 crore Vs Rs 370.7 crore, YoY

#2 Net interest income increases 10.88 percent to Rs 903.4 crore Vs Rs 814.7 crore, YoY

#3 Gross NPA rises to 3.54 percent Vs 3.53 percent, QoQ

#4 Net NPA jumps to 1.66 percent Vs 1.58 percent, QoQ

Akzo Nobel India, Bhansali Engineering Polymers, Datamatics Global Services, Diamines & Chemicals, Hind Rectifiers, Magadh Sugar & Energy, MRF, Orient Electric, Pradeep Metals, Punjab Chemicals and Crop Protection, Radico Khaitan, Suryalata Spinning Mills, United Breweries, V-Guard Industries

#1 JLR’s execution can lead to significant upsides; demerger may unlock value for CVs

#2 Raise target multiple for JLR to 3.5x EV/EBITDA (from 2.75x) given potential upsides

#3 EBIT margin can rise 8.5 percent in FY25 (7.8 percent earlier) to 10.1 percent by FY27

#4 EBIT margin can have further potential to rise to 11- 12 percent by FY30

#5 Growth should be supported by the rundown of Jaguar ICE, success of new Jaguar EVs

#6 Stock is currently trading at 5.4x FY26 EV-EBITDA

#7 Key downside risks are sharp drop in demand in China/EU and rising incentives