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Hello Folks! The market closed up for a third straight day.
Nifty and Sensex gained +0.5% each. Midcaps (+0.8%) and Smallcaps (+0.5%) followed suit. The advance-decline ratio was in favor of bulls (3:2).
Most sectors ended in the green. PSU banks (+1.7%), NBFCs (+1.1%), and banks (+0.9%) were the top winners.
Retail Ownership of blue chip stocks is at a record low. Read our top story below to find out more.
Q1 earnings season is officially over. What does it tell us about what FY25 will look? More details below.
Shipbuilding stocks were beaten up today, with Mazagon dock shipbuilders ending as the top 500 losers. Check out their charts below to find out why.
Ola Electric was volatile, the stock fell over 12% from its intraday high after doubling IPO investors' money earlier today.
Zomato was in focus after 21 cr shares (2.4% equity) changed hands in a big block deal, reports say Antfin Singapore was the likely seller.
KEI Industries gained +8% after UBS initiated coverage on the stock, and the brokerage sees a +31% upside from the current levels.
Allcargo logistics jumped +9% after reporting a solid July business update.
Optiemus infra-com soared +12% after announcing a foray into telecom equipment manufacturing as a partner with Tejas network.
Nucleus Software Exports was locked in a +20% upper circuit after saying it would consider a share buyback proposal on August 22.
De-risk your portfolio before it is too late
India's bull market has been crazy. But even amid all the massive gains, the two clear winners have been smallcap and midcap stocks.
In fact, these two segments have become so attractive that retail investors' shareholding in blue chip stocks has fallen to a 22-year low of 36.8%! Ditto for institutional holding in Nifty 50 firms, which has now fallen to its lowest level since 2001.
It's a no-brainer why this is happening. Both the midcap 100 and small-cap 100 indices have beaten the nifty over the last year. A large part of this is because many heavyweight stocks, like HDFC Bank, missed out on the rally. But sadly, the good times can't continue forever for midcap and small-cap stocks.
There's plenty of reason to be cautious.
For starters, valuations are near all-time highs. The midcap 100 index is now trading at its highest relative level to the Sensex, while the small-cap index is close to its 2005 record. We have already seen some favorite retail stocks take a hit. Mazagon Dock shipbuilders have corrected -26% from their July highs, RVNL has dropped -13% while IREDA has fallen -23%.
Secondly, we will need to wait and see ho earnings growth pans out. Nuvama notes that in its smallcap and midcap universe. Q1FY25 finally saw an earnings downgrade for this fiscal after three straight quarters of upgrades. There's a lot of different reasons for this but it's a sign to take a step back and reassess your portfolio.
Finally, this doesn't mean you should abandon smallcap and midcap stocks. Only that it also makes sense to load up some large caps as well. Most experts agree that FY25 will be the year of IT, CHEMICALS AND PRIVATE BANKS. These sectors are set to bounce back after a rough 2024 and provide enough of a large-cap defense to help you weather any future small and midcap corrections!
Q1 Earning Report card
The Q1FY25 earnings season has wrapped up! As we move ahead, what does India Inc.'s report card look like? and what does it say about the rest of the fiscal? we got you covered
Top and bottom converge: For most of FY24, PAT growth for a majority of the BSE 500 companies beat revenue growth. This is primarily because the bottom line was lifted by key tailwinds like lower input prices & bank credit costs.
This has started to converge now with the topline and bottom line of BSE 500 firms ( ex-OMC ) growing on average 8% - 10% each.
Sectors winners and losers: Earnings stabilized for dark horses like IT and FMCG, while big FY24 winners like auto & industrials lagged. There were also surprise outperforms like pharma. But within consumption stocks, there's been an uneven gap with things like hotels and jewelry slowing down, while durables did well due to industry-specific factors.
Earnings Downgrade: For the Nifty, Q1 PAT growth was sub-5%, which is its lowest since 2020. As a result, most experts have cut FY25 earnings by 1.5%-2.5%.
For specific stocks, Motilal Oswals says Coal India +10.8%, Dr. Reddy's Labs +6.7%, and Apollo Hospital +4.4% saw the biggest earnings upgrades for FY25. On the other hand, BPCL -16.3%, BHARTI AIRTEL -11%, and Hero Motor Corp -9.4% saw the biggest downgrades.
