Category: Business & Economy

A brokerage called Kotak Institutional Equities has given Bajaj Housing Finance shares a ‘sell’ rating because they believe the stock is too expensive. They set a target price of Rs 100, which suggests that the stock could fall by 21%.

According to Kotak, Bajaj Housing Finance is trading at a high price—4.7 times its book value and 39 times its expected earnings for 2026. The brokerage predicts that the company will grow its earnings by 25% each year from 2024 to 2027, mainly due to a 24% growth in its assets. They also expect the company’s profit margins to stay steady and plan to manage costs carefully.

Bajaj Housing Finance is the second-largest home loan company in India, with Rs 91,400 crore in assets this year. They focus on lending to salaried workers who have good jobs. The company has been growing rapidly, with an expected growth rate of 24% for the next few years. Their loan types include home loans (58%), loans against property (10%), and loans for developers (11%).

Bajaj Housing Finance has kept its asset quality strong, with bad loans at just 0.3% this year, which is much better than many of its competitors. They have good strategies to keep credit risks low, focusing on safe borrowers and using smart technology for lending.

Despite these strengths, Kotak warns that there are risks involved, such as changes in interest rates and tough competition in the market. As of 1:30 PM today, the Bajaj Housing Finance stock was unchanged at Rs 126.50.

Dharmesh Shah from ICICI Direct shares his thoughts on the stock market’s recent performance. He believes that while there will be ups and downs, now is a good time to buy stocks when their prices dip. The dollar index has changed, and despite recent highs, he expects it to stabilize around 85.75.

This year has started brightly, with the Nifty 50 index rising by about 500 points. A key level of 23,900 has been broken, and he predicts the Nifty could rise to 24,500 soon. But January is known for its unpredictable nature, especially with earnings reports coming up and the US presidential transition affecting global policies.

In the automotive sector, recent positive sales numbers have surprised everyone. Stocks like Tata Motors and Maruti are bouncing back due to being previously undervalued. Among the auto stocks, Mahindra & Mahindra looks strong, with a target price of 3,350. Two-wheeler stocks like Eicher Motors are also promising, expecting to reach around 5,650. Additionally, tire companies like Ceat Tyres and JK Tyres should benefit from lower crude oil prices.

On the international front, the dollar index has been fluctuating. After the US election, it climbed to 109, but there’s a chance it might struggle to get past 110-111. If this happens, it could be good for Indian metal stocks, which have already been factoring in some bad news. Stocks like Tata Steel and JSW Steel are considered good options in the metal sector.

Shah also emphasizes the potential in the defense sector, with Hindustan Aeronautics (HAL) being a top pick due to its strong fundamentals and technical support. He anticipates a target price of 4,685 for HAL, with a stop-loss at 3,920.

Looking ahead, the infrastructure sector seems bright, especially with expectations of increased government spending. JK Cement is identified as a promising stock, with an anticipated target of 5,320.

There has always been a lot of talk about how people in cities and countryside spend money differently. But one thing we don’t often discuss is how these spending habits have changed over time.

For example, think about how people now order food. Years ago, most people would go to restaurants or cook at home. Today, many people use apps to order food online. This big change has created new businesses and job opportunities for delivery drivers, app developers, and restaurant partners.

This trend of changing how we consume goods is likely to stick around. Understanding it helps us see which companies are growing and which are struggling in both rural and urban areas.

On Friday, shares of Bharat Electronics Ltd. increased by 0.65% to reach Rs 294.70 as of 12:23 PM (IST). During the day, the stock climbed to a high of Rs 297.30 and dropped to a low of Rs 294.40. The company’s return on equity (ROE) is quite impressive, sitting at 24.4%. Around noon, about 12:23 PM, the trading volume was good, with total transactions amounting to Rs 3.74 crore.

Bharat Electronics Ltd. has seen its price reach a 52-week high of Rs 340.35 and a low of Rs 171.70. The stock’s Beta value, which shows how much it can go up or down compared to the market, is 1.4399, indicating a bit more volatility.

In terms of ownership, as of September 30, 2024, the promoters own 51.14% of the company, Foreign Institutional Investors (FIIs) hold 17.27%, and domestic institutional investors possess 15.81%.

Key Financial Information

In the quarter ending September 30, 2024, Bharat Electronics Ltd. reported sales of Rs 4762.66 crore, which is up 7.09% from the previous quarter and 14.87% from the same time last year. The net income after tax for this quarter was Rs 1092.45 crore, a significant increase of 38.4% compared to the same quarter a year ago.

Market Analysis

According to technical indicators, the MACD is showing a bearish trend. The MACD helps traders see when a stock’s price might change direction. When the MACD goes below its signal line, it suggests that the stock price may go down soon, and vice versa.

The share price of Bank of Baroda went up by 0.55% to Rs 242.55 at 10:31 AM IST on Friday. The stock reached a highest price of Rs 245.10 and a lowest price of Rs 241.45 during the trading day. In the last session, the stock closed at Rs 241.20. Around that time, about 4.58 crore rupees’ worth of shares were traded. The price-to-earnings (P/E) ratio of the stock is 6.28, which means investors are willing to pay more for every rupee of profit because they believe the company has good growth potential. The price-to-book (P/B) ratio is 1.14, showing what investors are willing to pay for the company even if it doesn’t grow. Bank of Baroda is part of the public sector banking industry.

Regarding holdings, promoters owned 63.97% of the company by the end of September 2024. Foreign investors held 9.87%, while domestic institutional investors had a share of 16.33%. For its last quarter ending in September 2024, Bank of Baroda announced consolidated sales of Rs 39,454.98 crore, which is 10.21% more than the previous quarter’s Rs 35,800.94 crore and a 10.31% rise from Rs 35,766 crore a year ago.

Tata Power Company’s shares went up by 0.35%, reaching Rs 393.80 during trading on Thursday at 1:13 PM IST. The highest price for the day was Rs 394.00, while the lowest was Rs 387.50. The company’s return on equity (ROE) is 11.42%, showing it’s making good profits from its investments.

At that time, about Rs 16.14 crore worth of Tata Power shares were traded, with a total of several shares changing hands. Over the past year, the stock hit a high of Rs 494.85 and a low of Rs 319.80. It has a Beta value of 1.7336, meaning it tends to be more volatile compared to the average stock market.

Promotion and Investor Holding

As of September 30, 2024, promoters own 46.86% of Tata Power, foreign investors (FIIs) hold 9.17%, and local institutional investors have 9.13%.

Financial Performance

For the quarter ending September 30, 2024, Tata Power reported sales of Rs 16,210.80 crore, which is a slight decrease from the previous quarter’s Rs 17,540.98 crore but a small increase from Rs 16,029.54 crore a year ago. After taxes, the company made Rs 926.53 crore, which is 5.83% more than last year.

Technical Analysis

Currently, the MACD shows a bearish trend, suggesting that the stock may drop in price. The MACD helps to signal price trends by comparing two moving averages over different time periods. When it falls below its signal line, it indicates that the stock might see downward movement.

Billionaire Mukesh Ambani is planning to list Reliance Jio, the telecom part of Reliance Industries Ltd (RIL), on the stock market. This could be the biggest IPO ever in India, aiming to raise around Rs 35,000-40,000 crore! A report says that Jio could be valued at $120 billion, with the IPO expected in the second half of 2025.

The plan includes selling both new and existing shares, and there might be a special placement for some investors before the IPO. Talks about this special placement have already started, but it’s unclear how many new shares will be offered versus existing ones.

If it happens, the Reliance Jio IPO would surpass Hyundai India’s IPO of Rs 27,870 crore from October 2024, marking a huge step for the Indian stock market.

This IPO might also boost RIL shares, which had a tough year in 2024, closing with a loss for the first time in a decade. RIL shares have dropped about 6% over the past year. Last July, Jefferies, a global investment bank, suggested that Jio’s listing could happen in 2025 with a value of $112 billion.

Jio has also been leading recent price increases in services, aiming to get more subscribers. However, the telecom industry has been losing subscribers since the price hikes started, but the drop is slowing down. Jio currently leads the market with 40% of subscribers. Experts warn that competition in the industry could lead to price wars, which might affect profits.

They believe it will take a few months for the price hike to fully show up in revenues because most Jio users are on long-term plans.

Shares of Eicher Motors, the company that makes Royal Enfield motorcycles, jumped 7% to a new 52-week high of Rs 5,226 on the Bombay Stock Exchange. This surge happened during Thursday’s trading, thanks to excellent sales figures in December.

The company shared that it sold 79,466 Royal Enfield motorcycles last December, which is a 25% increase compared to 63,887 units sold in December of last year. Motorcycle sales for models with engine sizes up to 350 cc also grew by 25%, with 69,476 units sold. Models with larger engines, above 350 cc, increased sales by the same percentage, reaching 9,990 units. Exports of these motorcycles shot up by an incredible 90%, reaching 11,575 units.

For the first nine months of this financial year, Eicher Motors sold 727,077 Royal Enfield motorcycles, a 6% rise from 685,059 units sold during the same period last year.

B Govindarajan, the CEO of Royal Enfield, expressed excitement about their growth, stating they are eager to inspire motorcycle lovers worldwide with exciting initiatives as they prepare for 2025.

Recently, Royal Enfield launched a new assembly plant in Bangkok, making it their sixth global facility after locations in Argentina, Colombia, Brazil, Bangladesh, and Nepal. The company is also expanding its second-hand motorcycle business, REOWN, to 236 cities across India.

According to Niftystat data, the average target price for Eicher’s stock is Rs 4,869, suggesting a slight drop of 7% from current prices. However, out of 38 analysts, most agree that the stock is a “Buy.”

As of 12:17 PM, the stock was up 6.4% and trading at Rs 5,198.7. Over the past year, Eicher Motors’ stock has gained 34%, and it has increased by 101% over the last three years.

Disclaimer: The recommendations and views here are personal opinions and do not reflect the views of The Economic Times.

On Thursday, Havells India Ltd.’s shares dropped slightly by 0.03%, trading at Rs 1679.95 around 12:37 PM (IST). This decrease comes as the Nifty index was up by 301.25 points, reaching 24044.15. The stock had previously closed at Rs 1680.50.

The company’s shares have had quite a range over the past year, hitting a low of Rs 1280.20 and a high of Rs 2104.95. Currently, Havells has a market value of Rs 105,447.79 crore on the Bombay Stock Exchange (BSE). So far, 4,360 shares have been traded today.

At its current price, the stock is trading at 74.75 times its earnings per share (EPS) of Rs 22.50 from the last 12 months. It also has a book value that makes it 12.75 times its current price. The company’s return on equity (ROE) is at 17.07, which is a good sign.

For the three months ending September 30, 2024, Havells reported sales of Rs 4,632.20 crore, which is a 17.19% increase compared to the same quarter last year. They also made a profit of Rs 268.23 crore, showing a 7.69% yearly growth.

In terms of technical analysis, analysts look at something called the Relative Strength Index (RSI) to help gauge the stock’s performance. As of Thursday, the RSI value can give clues on whether the stock is overbought (over 70) or oversold (under 30). However, analysts warn that RSI should not be the only basis for a trading decision, just as no single valuation ratio can be used to recommend buying or selling stocks.

As of 12:27 PM IST on Thursday, shares of Bharat Electronics Ltd. were priced at Rs 292.65, which is a decrease of 0.42% from the previous day’s closing price of Rs 293.90. This change came as the BSE Sensex dropped significantly, losing 816.01 points and standing at 79,323.42.

The stock has been on a rollercoaster ride, hitting a 52-week high of Rs 340.35 and a low of Rs 171.70. According to data from NiftyStat, the total number of shares traded by that time reached a significant amount, with a turnover of Rs 12.69 crore.

At the current price of Rs 292.65, the stock is valued at 47.11 times its earnings per share (EPS) of Rs 6.21 from the past 12 months. This high Price-to-Earnings (P/E) ratio suggests that investors are optimistic about the company’s future growth. It also trades at a Price-to-Book (P/B) value of 9.02, which reflects what investors are willing to pay for the company, even if it is not growing at the moment.

The stock’s Beta value, which tells us how much its price moves compared to the overall market, is 1.4399 means it has higher volatility.

Shareholding details reveal that the promoters own 51.14% of the company as of September 30, 2024. Foreign Institutional Investors (FIIs) hold 17.27%, while Domestic Institutional Investors (DIIs) own 20.11%.