Category: Business & Economy

The Reserve Bank of India (RBI) will reveal its latest decisions on Friday at 10:00 am. This comes after a three-day meeting that started on December 4. For the first time in more than two years, the committee in charge of monetary policy will pay more attention to the slowing growth of the economy.

The RBI has kept its interest rate at 6.5% for the last ten meetings. They have been careful about inflation, especially because food prices have been high, but they remain hopeful about the economy bouncing back due to good rains and expected spending on infrastructure projects. Recently, they changed their view from “removing support” to a more neutral stance on the economy.

The central bank has a 7.2% growth forecast for the economy in the financial year 2024-25, but this has come under pressure after a big drop in growth seen in the last quarter. Some economists have lowered their growth expectations to 6%. High inflation, partly caused by changing food prices, has kept general prices at an elevated 6.2% in October. Because of this situation, the RBI may lower its growth forecast and increase its inflation expectations.

What to Expect?
With more people calling for interest rate cuts to help the economy, more members of the RBI committee are likely to support lowering rates. In the last meeting, one external member voted for a small cut in the interest rate, and analysts expect at least two more members to agree this time.

The availability of money in the banking system has dropped significantly, making it likely that the RBI will lower the required reserves that banks must hold. Initially, there was about ₹4.5 trillion in September, but it has now dropped to just ₹1.2 trillion. Because of this tight situation, economists expect the RBI to take action with longer-term loans.

The future of RBI Governor Shaktikanta Das is also important, as his term ends on December 10, and it is unclear if he will stay or be replaced.

Outcomes from the Last Meeting
At the last meeting on October 9, the RBI kept the interest rate at 6.5% with a majority of votes. They wanted to balance keeping prices in check while helping the economy grow. Their growth forecast stayed at 7.2% for the upcoming financial year, with predictions showing steady growth throughout.

Inflation was projected at 4.5%, with expectations of slight increases in the coming quarters. Meanwhile, the Indian rupee has been stable compared to other currencies.

In other news, the RBI increased limits for UPI transactions to make digital payments easier. They also introduced a new feature for account lookups to prevent mistakes in money transfers. Governor Das emphasized that banks should be careful about their financial exposures.

Foreign investment has shown positive signs, but India’s current account deficit has widened. The RBI also allowed individuals taking floating-rate loans to avoid pre-payment penalties and is looking into new funding options for Urban Cooperative Banks.

Finally, the RBI is launching a new system to help banks manage risks related to climate change

Today, the stock market enjoyed a recovery, with stocks up over 1% after a short break. Here are some key companies to watch due to recent news:

Mishtann Foods: The government’s financial watchdog, Sebi, has asked Mishtann Foods to return nearly Rs 100 crore. This money was said to be misused in questionable deals with related businesses.

Canara Bank: The Reserve Bank of India (RBI) has approved Canara Bank to sell parts of its stake in Canara Robeco AMC and Canara HSBC Life. They plan to reduce their ownership by 13% and 14.5% respectively through an IPO (Initial Public Offering).

Spandana Sphoorty: The credit rating agency Icra has changed Spandana Sphoorty’s outlook from stable to negative, though their ratings remain at ICRA A+.

Nykaa: Nykaa announced that Nihir Parikh has stepped down as the CEO of Nykaa Fashion, effective December 5.   Dr. Reddy’s Laboratories: This company reported that the Kazakhstan revenue authority slapped a fine of Rs 28.7 lakh on its subsidiary.

– ABFRL (Aditya Birla Fashion and Retail): The company revealed in a notice that it received a GST demand for Rs 2.45 crore.

– Ola Electric: The Central Consumer Protection Authority has requested more documents from Ola Electric regarding a show cause notice linked to over 10,000 complaints.

– Afcons Infrastructure: The company has successfully completed the longest tunneling project for the Delhi Metro Rail Corporation in Phase 4 of the Delhi Metro.

– Ramco Systems: Ramco has teamed up with Hanjin Information Systems to help Korean aviation companies improve their Maintenance and Engineering (M&E) services.

On a bumpy Thursday, our domestic markets ended the day higher, getting ready for a big announcement from the Reserve Bank of India (RBI). Today, we expect markets to remain unpredictable as traders await the RBI’s policy decisions. They think the markets will likely keep going up, even if it starts off shaky on Friday morning.

Market Trends: What to Watch For
– Short-term Outlook: As long as the market stays above 24,300 points, it looks promising. Traders might consider buying when prices dip. If things go well, the index could reach 25,000 soon!
– Fear Index: The India VIX, which shows how scared or confident investors are, went up slightly by 0.54% to a level of 14.53.

Stocks to Keep an Eye On:
1. Granules
2. Manappuram

These stocks are currently in a special ban period because they’ve hit a certain trading limit.

Currency Update:
The Indian Rupee bounced back from its lowest point, ending the day up by 3 paise at 84.72 against the US dollar after a day of steady trading.

Buying and Selling:
Foreign investors were active, buying shares worth ₹8,539 crore on Thursday, while domestic investors sold shares worth ₹2,304 crore.

Foreign Investment Summary:
The amount of money foreign investors are betting against Indian stocks dropped from ₹82,563 crore on Wednesday to ₹45,397 crore on Thursday.

(Disclaimer: The views expressed are of the experts and do not represent the views of NiftyStat.)

In New Delhi, trading in sugar shares saw some big changes on Thursday. Triveni Engineering & Industries Ltd. was the top performer, up by a whopping 9.61%! Other companies in the green included Simbhaoli Sugars Ltd. (up 1.34%), DCM Shriram Industries Ltd. (up 1.08%), and Avadh Sugar & Energy Ltd. (up 0.66%).

On the flip side, EID Parry (India) Ltd. dropped by 1.62%. It wasn’t alone—Magadh Sugar & Energy Ltd. fell by 1.50%, and Ugar Sugar Works Ltd. went down by 1.41%.

The overall market also had an exciting day, with the NSE Nifty50 index climbing 240.96 points to reach 24,708.4. Similarly, the BSE Sensex rose by 809.53 points, finishing at 81,765.86.

In the Nifty pack, Tata Consultancy Services (up 2.52%), Infosys (up 2.42%), and Titan Company (up 2.28%) were among the big winners. However, SBI Life Insurance Company saw a decrease of 1.43%, while Bajaj Auto dropped by 1.2%.

Overall, it was an eventful day for sugar stocks and the market as a whole!

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will announce important policy decisions on December 6, 2024, at 10:00 am. This three-day meeting, beginning on December 4, is very important because it is the first time in over two and a half years that the MPC will focus more on slowing economic growth.

The RBI has kept one of its main interest rates at 6.5% during the last ten meetings. They are concerned about high food prices, which are driving inflation up but have also been positive about growth because of good monsoon rains and hopes for increased investments in businesses.

RBI Governor, Shaktikanta Das, has ruled out cutting interest rates right away, but there are worries that the policies might be slowing down economic activity. Recently, Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal have called for lower borrowing costs to help boost growth.

Many bond traders think a rate cut is coming soon, as bond yields are falling. Economists like Teresa John believe the RBI will recognize the need for support for the economy and will likely cut rates next year. However, she suggests they might surprise everyone with a cut now.

The RBI is also expected to lower its economic growth forecasts due to disappointing growth numbers. Economists have reduced their predictions too. For example, Goldman Sachs now expects growth to be only 6% instead of 6.4%. Meanwhile, inflation has risen above the RBI’s target of 4%.

This situation makes it challenging for the RBI. Changes in food prices have caused inflation to reach 6.2%, the highest rise in over a year. Economists point out that the RBI might lower its annual growth prediction by 0.3% to 0.4% while increasing its inflation forecast.

There’s also talk that more MPC members may support an interest rate cut, especially since one member already voted for it. This could lead to at least two members voting to lower the key rate to help boost growth.

Furthermore, the RBI might introduce additional liquidity measures due to recent capital outflows and pressure on the Indian rupee. The rupee has been dropping in value, which means any cuts might further weaken it.

Liquidity in the banking system is tight due to the RBI’s large interventions and cash outflows. Analysts think the RBI could cut the Cash Reserve Ratio (CRR), which is the amount of money banks need to keep on hand, as a way to signal upcoming monetary easing.

People are also curious about who will be the next RBI Governor since Das’s term ends on December 10. Last time he was extended, it was announced well in advance.

Rahul Sharma, a director at JM Financial Services, has positive news about the stock market. He believes it’s a good time to buy stocks after a little drop, and that we might see the Nifty index reach 24,800 points soon. The Nifty has recently crossed 24,500 points, which is a good sign.

After gaining around 500-600 points in a few days, the market is now seeing some corrections—a slight drop is normal after such rises. Sharma suggests that during this dip, investors should consider buying stocks. He points out that bank stocks, especially private banks like ICICI and HDFC, are currently looking strong and likely to lead the market in the next week or two.

Even though today saw some corrections, blue-chip stocks like Infosys, Reliance, and TCS are driving the market higher. Sharma predicts the Bank Nifty could hit 54,000-54,500 in the near future, and the Fin Nifty could reach 25,000-25,200.

When it comes to private vs. public sector banks, Sharma favors private banks for quick gains. However, he sees potential in public banks too for long-term investments.

Sharma also recommends several stocks related to financial markets like CDSL, BSE, and Angel One. CDSL and BSE have done well recently, but he advises booking profits in those, while Angel One may continue to rise.

For pharmaceutical stocks, Divi’s Laboratories is performing well, and he suggests buying it around ₹6,000 with hopes it could rise to ₹6,500.

Finally, Sharma suggests investing in companies that could benefit from increased spending on infrastructure, like Larsen & Toubro and NTPC, which could provide a return over the next three months as the country’s economy improves.

On Thursday morning, sugar company shares were mostly down when the stock market opened. However, some companies did see small increases. Here are a few details:

– Top Gainers:
– Triveni Engineering & Industries Ltd.: up 4.74%
– Avadh Sugar & Energy Ltd.: up 0.77%
– Shree Renuka Sugars Ltd.: up 0.35%
– Other winners included Dhampur Sugar Mills Ltd, Ponni Sugars (Erode) Ltd, and Kothari Sugars & Chemicals Ltd., with small gains.

– Top Losers:
– EID Parry (India) Ltd.: down 1.15%
– Magadh Sugar & Energy Ltd.: down 1.14%
– Dwarikesh Sugar Industries Ltd.: down 0.74%
– Other companies like Bajaj Hindusthan Sugar Ltd and Ugar Sugar Works Ltd also fell a bit.

Meanwhile, the overall stock market was not doing well. The NSE Nifty50 index dropped by 118.46 points, sitting at 24,349.0. The 30-share BSE Sensex fell by 315.33 points, now at 80,641.0.

In other areas of the market, some big names like Bharti Airtel Ltd. (up 0.56%) and Tata Consultancy Services Ltd. (up 0.32%) had small gains. But companies like Bajaj Auto Ltd. (down 2.1%) and SBI Life Insurance Company Ltd. (down 2.05%) were not doing so well.

Overall, it’s a mixed day for stocks, especially in the sugar sector!

ICICI Securities is telling investors to buy shares of Hatsun Agro Products. They believe the price will reach Rs 1,250, while the current price is Rs 1,131.

Hatsun Agro was started in 1986 and is a medium-sized company in the FMCG (Fast-Moving Consumer Goods) sector, with a market value of Rs 25,147.17 crore. This company mainly sells milk and milk products.

In the latest quarter ending September 30, 2024, Hatsun Agro made Rs 2,078.72 crore in total income, which is a decrease of 12.56% compared to the previous quarter but an increase of 8.29% from the same period last year, which was Rs 1,919.52 crore. They also made a net profit of Rs 64.32 crore during this quarter.

Why Invest in Hatsun Agro?
ICICI Securities thinks that Hatsun Agro’s ice cream business will make more profit over time. The reasons are:

1. Better use of their Govindapur plant will help increase profits.
2. They have lower selling costs than their competitors because they provide refrigeration and use their own delivery system called HAP Daily.
3. They are launching new premium products.

The brokerage predicts that Hatsun Agro will see a growth of 14.0% in revenue and 37.2% in profits each year until 2027. They calculated the target price to be Rs 1,250, which means a price-to-earnings ratio of 53 and 40 times their expected earnings in 2026 and 2027.

Ownership
As of September 30, 2024, promoters own 73.17% of Hatsun Agro, foreign institutional investors (FIIs) own 3.29%, and domestic institutional investors (DIIs) own 10.17%.

Motilal Oswal Financial Services recently shared their thoughts on Swiggy, giving it a “neutral” rating with a target price of Rs 475. Currently, Swiggy’s stock price stands at Rs 522.7.

In the second quarter of FY25, Swiggy made Rs 36.1 billion, which is an 11.7% increase compared to the previous quarter and a whopping 30.4% compared to last year. In the food delivery section, Swiggy reported Rs 71.9 billion in goods ordered (GOV), marking an increase of 5.6% from the last quarter and 14.6% from a year ago. They expect food delivery to grow in the high teens for FY25.

Swiggy’s grocery delivery service, Instamart, performed really well, racking up Rs 33.8 billion in GOV, which is a 75.5% increase from last year. To keep up with demand, Swiggy plans to double its dark stores (places where food is prepared and stored) by FY25 from 523 stores in FY24.

In terms of earnings, Swiggy’s food delivery service had an adjusted EBITDA margin of 1.6%, which is an improvement, as well as a slightly better contribution margin of 6.6%. However, the overall adjusted EBITDA was a loss of Rs 3.41 billion. Instamart’s contribution margin is still negative at -1.9%, but it is improving.

Swiggy reported a net loss of Rs 6.2 billion but noted a 4.7% decrease in losses compared to a year before. They believe they can reach breakeven in overall adjusted EBITDA by the third quarter of FY26.

Swiggy has been a key player in food delivery and grocery delivery, but it’s losing ground to its main competitor, Blinkit. To grow, Swiggy needs to boost its sales and improve its business operations.

According to Motilal Oswal, they expect food delivery orders to grow by 12.5% a year, along with a small growth in average order value (AOV). Quick commerce (Q-commerce) is expected to grow even faster at 23.6% a year.

Swiggy is projected to have a profit margin of -16.1% in FY25, improving to -3.9% in FY26, and then turning positive at 1.8% in FY27.

Despite some changes, Swiggy still faces challenges ahead. They maintain their DCF-based valuation at Rs 475, suggesting a 5% drop from the current price. Overall, the brokerage keeps a neutral rating on the stock.