Author: Sarita Jena

On Friday, the Indian stock market opened a bit lower. The Sensex and Nifty are watching closely as the Reserve Bank of India (RBI) is set to announce its decision on interest rates today. Many people think the RBI will lower rates to help boost our slowing economy.

By around 9:20 am, the Sensex was down by 72 points, sitting at 77,985, while the Nifty50 dropped by 19 points to 23,584. This week, the Nifty50 had gained a little, around 0.5%, but it’s still down about 4.4% compared to the last meeting on December 6, 2024. This drop is mainly due to slow growth and weaker company earnings.

Today’s decision will be important. It’s expected to be the first rate cut since May 2020, especially after the government recently decided to cut personal income tax to help people spend more. The RBI will announce its decision at 10:00 a.m. IST.

Looking at individual stocks, some of the big losers on Sensex included Power Grid, ITC, SBI, Nestle, and TCS, which fell between 1% and 3%. On the upside, Bharti Airtel, UltraTech Cement, Zomato, Tata Steel, and M&M saw gains. Bharti Airtel stood out, rising almost 4% after it shared impressive earnings of Rs 14,781 crore in the third quarter.

In contrast, SBI shares dropped by nearly 1.5% despite seeing a big jump in net profit to Rs 16,891 crore, which was much higher than the expected Rs 16,219 crore. Cochin Shipyard’s shares fell more than 7% after it reported a 27% decline in its net profit to Rs 177 crore for Q3 FY25. More news is expected soon!

JM Financial has suggested that you should consider buying shares of Tata Power Company. They believe the stock price could reach Rs 456 within a year, although they previously thought it could go as high as Rs 481. Right now, Tata Power’s shares are priced at Rs 369.

Tata Power has been around since 1919 and is a big player in the energy business, worth about Rs 118,547 crores. They earn money from several areas, including supplying power, managing projects, and dealing with financial leases.

In the last three months of December 2024, Tata Power made a total income of Rs 15,793 crore. This was a bit less than the previous quarter, but up when compared to the same time last year. The company also made a net profit of Rs 1,001 crore recently.

The leadership team includes key figures like Mr. Natarajan Chandrasekaran and Mr. Praveer Sinha. The auditors are SRBC & Co LLP. As of December 31, 2024, Tata Power has about 320 crore shares available for trading.

Why Should You Consider Investing?

In the latest quarter, Tata Power’s revenue was Rs 154 billion, with profits growing 8% year-over-year. The company is doing well in several areas:

– They are expanding their power transmission network (2,414 km of new lines are being built).
– Their power distribution business is expected to grow by 20% each year in Odisha.
– They have plans for renewable energy projects (10 GW in the pipeline) and pumped hydro storage.

Tata Power is investing Rs 200 billion this year to support their growth. JM Financial believes that the company’s revenue and profits will grow by 9% and 17%, respectively, over the next few years. They still keep a “BUY” rating, estimating that the price can rise by 26% based on their calculations.

As of December 31, 2024, company owners had 46.86% of Tata Power, while foreign investors held 9.45% and domestic investors 15.6%.

The Chairman of State Bank of India (SBI), CS Setty, shared that the bank’s goals for profit, known as Return on Equity (ROE) and Return on Assets (ROA), remain on track. He pointed out that in the same quarter last year, the bank set aside ₹7,100 crores for pension costs, which was a one-time expense. Even considering that cost, SBI’s results still look good.

Setty explained that the bank’s Net Interest Income (NII), which is the money made from lending after subtracting costs, has been affected recently because the cost of borrowing money is rising. However, he believes that these costs will stabilize, allowing NII to improve in the future.

Regarding ROE and ROA, SBI has consistently performed well, showing an ROE above 20%. While they aim to maintain this level, they are sticking to their target of 15% for ROE.

Setty also mentioned the impact of market fluctuations on the bank’s profits. Last quarter, the bank experienced both positive and negative adjustments that affected their overall numbers.

Looking ahead, he said that the bank expects to grow anywhere from 14% to 16% this year, especially in areas like small businesses and agriculture, where they see potential for growth due to recent government budget proposals.

About new government rules that affect taxes on certain deposits, Setty explained SBI has a large share in that market, which might work out positively for them.

Finally, with upcoming rate changes from the Reserve Bank of India, Setty predicts a slight cut of about 0.25%. However, he doesn’t believe this will significantly affect SBI because most of their loans aren’t directly tied to those cuts.

On February 7, shares of ITC, a company that makes cigarettes and runs hotels, are in the spotlight. They just shared their financial results for the third quarter of FY25, and it was a mixed bag. The company’s profit after tax fell by 7% compared to last year, coming in at Rs 4,935 crore, down from Rs 5,335 crore.

However, ITC’s total earnings grew by 8%, reaching Rs 20,350 crore. The board also announced a dividend of Rs 6.5 per share for the financial year ending in March 2025. The company’s profits before tax (EBITDA) rose by 3% year-on-year. When looking just at the paper business, that number goes up to a 5% increase.

Breaking it down by business segments:
– Cigarettes: Revenue grew by 8% and profits before tax increased by 4%.
– Hotels: This part of the business did really well, with revenues hitting Rs 922 crore, which is a 15% increase from last year.
– FMCG (Fast-Moving Consumer Goods): Sales increased by 4% to Rs 5,418 crore despite some slow demand.
– Paperboard: This business faced tough competition from cheaper imports from China and Indonesia.
– Agri-business: This area grew by 10% thanks to stronger sales in leaf tobacco and value-added exports. Profits in this segment were up by 22%.

A brokerage firm called Nuvama maintained a “buy” recommendation for ITC and set a target price of Rs 571 per share, praising the performance in the cigarette segment but noting that overall profit margins have dipped.

Raw material costs have impacted profits, leading to a drop of 239 basis points in profit margins to 34.2%. Furthermore, Nuvama mentioned that ITC has acquired Prasuma, a company that specializes in frozen and ready-to-cook foods, at a reasonable cost, helping ITC grow in this booming market.

Despite these positive steps, Nuvama advised being careful in the short term due to a slowdown in the urban market, rising costs for raw materials, and weaker profits in the FMCG and paper divisions.

Asian Paints’ shares have been going up and down recently and are now at Rs 2,277. This is a big drop of about 37% from their highest price of Rs 3,590. The daily price chart shows that the stock is near some important short-term averages (EMAs), but it’s also below its medium (50 days) and long-term averages (100 and 200 days). If the stock can break past these levels, it may rise again.

Currently, Asian Paints seems to be stabilizing. There’s a pattern called a “Double Bottom” on the price chart, which often suggests that a stock may start to rise. Hardik Matalia, an analyst at Choice Broking, points out that this pattern, along with positive price movements, means Asian Paints could be getting ready for an upward surge.

Big price changes and more trading activity show that investors are starting to get interested again. If the stock stays above Rs 2,420, it could confirm this upward movement and may rise to Rs 2,700 shortly.

The Relative Strength Index (RSI) is at 56.90, showing a possible upward trend with room to grow. Due to these signs, Matalia thinks buying Asian Paints at the current price is a good idea, but he advises setting a strict stop-loss at Rs 2,200 to manage risks.

Asian Paints has lagged behind the overall market over the past few years, but its prices are currently near a support level from February 2021. The RSI on the weekly chart is also in an oversold range, signifying a potential rebound is possible. Ruchit Jain from Motilal Oswal mentions that unless there is some strong buying momentum, the stock might face resistance at higher levels. The immediate challenge for a price increase is around Rs 2,550, where the 100-day average lies. On the downside, he sees immediate support at Rs 2,200.

Recently, Asian Paints shares closed at Rs 2,273 on the Bombay Stock Exchange, showing little movement.

Swanand Kelkar from Breakout Capital Advisors has some exciting thoughts about investing in countries that are developing, known as emerging markets. While many people think these investments are too risky right now because of issues in the United States, Swanand believes there are good reasons to pay attention to these opportunities.

He points out that while the U.S. market has a high price-to-earnings ratio (22), emerging markets are cheaper at a ratio of around 20, with some even being as low as 10-11. This means you can get quality stocks for a better price! Countries like India are on the right track, focusing on better government budgets and milder inflation compared to richer countries. This creates a great environment for growth.

Despite concerns about foreign investment and a weakening rupee, Swanand explains that many investors focus mainly on the U.S. market because it represents a huge part of global investments. He compares it to cricket, saying when a player is scoring well, no one worries about their technique. But when their performance declines, everyone starts looking for flaws.

The U.S. has its issues, especially with its high debt, which could make investors shift their focus back to emerging markets. Swanand shares that the investing environment is volatile right now—with a lot of ups and downs. While it’s tough to predict when markets will hit bottom, he believes it’s essential to watch the bigger picture.

In summary, there are solid arguments for investing in emerging markets, especially in India, despite current challenges. If investor interest swings back, these markets could surprise many!

In New Delhi, mining stocks were on the rise this Tuesday at 11:32 AM. Here are some of the highlights:

– Top Gainers:
– Pokarna Ltd. increased by an amazing 8.95%!
– Aro Granite Industries Ltd. went up by 3.03%.
– NMDC Ltd. climbed by 1.87%.
– Other notable mentions include 20 Microns Ltd. (up 1.33%), MOIL Ltd. (up 1.22%), and Coal India Ltd. (up 0.79%).

– Top Losers:
– On the downside, Ashapura Minechem Ltd. fell by 1.90%.
– Lexus Granito (India) Ltd. dropped by 0.65%, and Sandur Manganese & Iron Ores Ltd. went down by 0.50%.

Overall, the stock market was doing well, with the NSE Nifty50 index rising by 183.16 points to reach 23,544.2. The 30-share BSE Sensex was also up by 632.6 points at 77,819.34.

Among big names in the Nifty pack:
– Larsen & Toubro Ltd. was up 3.5%,
– Tata Motors Ltd. rose by 3.23%,
– Bharat Electronics Ltd. jumped 2.85%.

However, some companies faced difficulties, including Trent Ltd. which fell by 6.32%, and Hero MotoCorp Ltd. which dropped by 1.35%.