Rise in input costs, inventory write-off, and pricing pressures led to a drop in gross margins. Higher competitive pressures led to cuts in operating profit margins and earnings estimates for FY24 and FY25. Most brokerages have a 'neutral' or a 'reduce' rating on the stock on account of valuations.
Stick to export-focussed plays, large-caps, say analysts
Brokers said selling pressure goatherd momentum as the weakening rupee fell to an all-time low of 54.46 against the US dollar.
Even though Bharat Forge's performance in the July-September quarter broadly met Street estimates and defence orders are on the rise, the subdued outlook for its global business has prompted some brokerages to adopt a cautious stance on the company. Analysts have reduced the company's earnings per share (EPS) estimates to account for the slow recovery of its overseas subsidiaries. Valuations are also trading at long-term averages, which could limit potential upsides.
The global COVID-19 situation, rollout of vaccines, geopolitical trends, Union Budget and economic recovery would be the major factors driving investor sentiments in 2021 after a tumultuous year which saw both 'the worst of times and the best of times' for the stock market, said analysts. What a year 2020 turned out to be! From witnessing gigantic losses to record-shattering gains, investors went on a roller-coaster ride amid the coronavirus pandemic and massive stimulus measures. Markets closed 2020 with remarkable gains of around 16 per cent, but will the winning ways continue in 2021 as well?
'The economy needs to deliver the expected 7.5% growth for the markets to deliver better than single digit returns.' 'Any disappointment in growth can see the markets correcting downwards.'
India's industrial sector grew by 9.1 per cent in September against 6 per cent in the same period last year.
Investors should await consistent growth metrics before looking at an investment in the company.
Over the next three - six months, UBS believes earnings will be the main driver for EM equities outperformance.
The Nifty Bank index has come off 15 per cent from its peak in February, underperforming the benchmark Nifty which is down 6%.
The recovery now under way is likely to be broad-based, stretching across geographies, businesses and verticals, according to Wipro chairman Azim Premji, who is the industry doyen.
The regulator typically meets overseas investors in the US and UK in the first half of a financial year, and had opted for a virtual meet last year too.
'Unless India Inc's earnings offer promise in March 2017 quarter, sentiment may not reverse in a hurry.'
Markets will be closed on Thursday and Friday on account of Holi and Good Friday, respectively.
Automobile sector accounts for the third-highest equity mutual fund contributions.
The stock of the retail chain Avenue Supermarts (Dmart) was the biggest loser in the BSE 100 Index shedding 4.35 per cent on Thursday and added to these losses on Monday by falling an additional 1.3 per cent. The Street was reacting to lower than expected operational performance by the company in the March quarter. The country's largest listed retailer by market capitalisation reported a 20 per cent year-on-year (y-o-y) growth in its top line to Rs 10,337 crore.
What has hit sentiment further is a draft proposal by the government to increase vehicle insurance premiums for financial year 2022-23 (FY23). Third-party motor insurance premiums have not been increased over the last two years and if this is approved, insurance costs for specific segments could rise by a fifth. The worst impacted is the 350cc and above two-wheeler segment, where premiums are up 21 per cent. Royal Enfield (Eicher Motor) is the market leader in the segment. The premiums in the 150-350cc two-wheeler category are also being inc
While prices sustaining lower levels is crucial, Govt actions are also a key monitorable given the forthcoming elections in 2024.
Equity benchmark Sensex pared its early losses to close higher by 231 points on Monday, helped by buying in index heavyweight Reliance Industries and ICICI Bank amid positive global trends. After falling 537.11 points to a low of 56,825.09 in morning trade, the 30-share BSE barometer staged a recovery in afternoon trade and climbed 231.29 points or 0.40 per cent to settle at 57,593.49. As many as 20 Sensex stocks closed with gains while 10 declined. The broader NSE Nifty recovered 69 points or 0.40 per cent to settle at 17,222 with 29 of its constituents ending in green.
Notwithstanding expectations of a pick-up in construction activity during a seasonally strong January-March quarter (fourth quarter) of 2022-23 (FY23), analysts are cautiously optimistic about the building material sector - encompassing paints, pipes, wood panels, tiles, metals, and cement - as volatile input costs, coupled with fears of a global slowdown, are making demand projections uncertain. Against this backdrop, analysts suggest investors stay selective and pick stocks of companies with stronger brand recall, expanding distribution network, diversified product profile, healthier balance sheet, and sustainable cash flow. "The government's various proposals under Budget 2023-24 (FY24) may lead to the building material segment growing between 8 per cent and 12 per cent for the next five years.
Market participants are now awaiting Thursday's meeting of the European Central Bank
Telecom shares rallied on hopes that they would hike tariffs after huge investments to acquire spectrum.
The year saw India's biggest corporate fraud, falling earnings, stock market crash, job losses and soaring food prices which hit the common man
Stocks reeled under huge losses on Thursday as the benchmark Sensex plunged sharply by over 465 points, the biggest single-day fall in three months, after India carried out "surgical strikes" on Wednesday night on terror launch pads across the Line of Control.
The Nifty ended down 35 points at 4,953. The BSE market breadth was negative. Out of 2,894 stocks traded, 1,544 declined while 1,270 advanced.
'Investors need to diversify at least 30% to 50% of their liquid wealth across different markets, asset classes, and instruments across the world.' 'Do this with proper guidance and advice.' 'Global investing is complicated, but if done right, is extremely rewarding.'
'We seem to be in a situation where we can do little, and nothing needs to be done anyway.'
Growth concerns on China, which has already seen the yuan getting devalued twice in August, have rattled global financial markets, including that of India.
Maruti Suzuki, Asian Paints, L&T, ONGC and Infosys have gained between 1%-1.5%.
Indices across Indian equity markets have edged towards new record highs before undergoing a small correction in the past few sessions. The National Stock Exchange Nifty has gained 20 per cent in the past year; mid-caps (up 33 per cent), small-caps (up 31 per cent), and micro-caps (up 44 per cent) have done better. Several factors have precipitated this rally.
The impact of RBI's monetary policy on the Aam Aadmi of India is going to be minimal.
Macro and micro environment are becoming more challenging.
Bajaj Finance was the top laggard in the Sensex pack, plunging around 6 per cent, followed by IndusInd Bank, SBI, M&M, Axis Bank, Bajaj Auto and ICICI Bank. NSE Nifty sank 229.55 points to 14,637.80.
Mutual funds have invested nearly Rs 94,500 crore in equities thus far in CY17, compared to Rs 32,000 crore in the year ago period, at a time when foreign investors have turned net sellers of India since August.
As if wanting to be an antidote to the coronavirus pandemic, the Indian stock market adorned carnival robes in 2021 with a tsunami of liquidity unleashed by global central banks coupled with supportive domestic policies and the world's largest vaccination drive sparking off a world-beating rally on Dalal Street, despite bouts of uneasiness over fizzy valuations. While the wider economy shuttled between recovery and relapse, dictated by multiple mutations of the virus, equity market benchmarks appeared headed in just one direction -- skywards. The dizzying upward journey has added a whopping Rs 72 lakh crore during 2021 to investors' wealth, measured as the cumulative value of all listed shares in the country, taking it to nearly Rs 260 lakh crore.
The recovery was led by pharma majors led by Dr Reddy's Labs.
The road ahead for the markets in the short term will depend on external factors rather than domestic developments.
The rupee on Thursday closed at its all-time low of 78.32 (provisional) against the US dollar as strong American currency and persistent foreign fund outflows weighed on investor sentiments. At the interbank foreign exchange market, the local currency opened at 78.26 and finally settled at its all-time low 78.32, unchanged from its previous close. On Wednesday, the rupee declined by 19 paise to settle at an all-time low level of 78.32 against the US dollar.
Yes Bank was the top gainer in the Sensex pack, surging 3.76 per cent, followed by SBI at 3.18 per cent.
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