FIIs may boost their position in equity markets in FY25; see top sectors and stock choices.

In FY25, FIIs could invest more in the equity markets; see top stocks and sectors for recommendations.

Foreign institutional investors' (FIIs') inflows are anticipated to remain high in the fiscal year 2025 due to the economy's strong growth and the pace of profits development. Global investors had previously invested Rs 1.21 lakh crore in the loan market and Rs 2.08 lakh crore in the domestic stock market in FY24. As a consequence, the BSE Sensex, the benchmark stock index, increased by about 25% in the 12 months leading up to March 2024, while the BSE Midcap and BSE Smallcap, two broader indexes, increased by 63% and 60%, respectively.

In the meantime, domestic equities market foreign portfolio investment (FPI) holdings fell to a decadal low of 16.6% in 2023, mostly as a result of a selloff brought on by portfolio underperformance and an increase in US bond rates. Alchemy Capital Management's Head Quant and Portfolio Manager, Alok Agarwal, stated: "FPI inflows in FY24 remained robust, indicating continued foreign investor confidence in the Indian market, even with the decline." Furthermore, domestic mutual funds and direct retail investors have significantly increased their free float ownership of NSE-listed companies, thereby reducing the influence of FPI flows. This has helped to counterbalance the impact of FPI outflows. The rise of retail investors in the domestic stock market has also been instrumental in this regard.

According to him, India is one of the few major economies that has double-digit growth in nominal GDP, double-digit increase in corporate profitability, and double-digit return on equity. "We anticipate sustained strong foreign direct investment (FDI) flows and their subsequent escalation in their market share in India," stated Agarwal.

As of March 15, 2024, FIIs held assets in the Indian financial services industry valued at Rs 18.29 lakh crore. According to NSDL statistics, information technology came in second at Rs. 6.45 lakh crore, followed by oil, gas and consumable fuels at Rs. 5.80 lakh crore, automobiles and auto components at Rs. 4.39 lakh crore, FMCG at Rs. 4.11 lakh crore, healthcare at Rs. 3.62 lakh crore and capital goods at Rs. 2.85 lakh crore.

Geojit Financial Services' chief investment strategist, VK Vijayakumar

"The FPIs were compelled to remain buyers in India due to the robustness of the Indian stock market and the improving macroeconomic conditions in the country. It's likely that this tendency will continue.

"With a consistent flow from domestic institutional investors (DII) and now if steady FII participation resumes, there is potential for India to surpass a 20% weighting in the MSCI EM Index by the second half of 2024 itself," Nuvama Institutional Equities stated in expressing its opinion on the strong inflows of institutional investors.

As of December 2023, FIIs owned a 71.93% holding in CarTrade Tech and a 64.42% investment in Samhi Hotels, according to data provided by Ace Equity. Additionally, they owned 62.71% of Delhivery and 63.72% of Paytm. Additionally, more than 50% of shares in a number of other businesses, including 360 One Wam, Redington, Zomato, Axis Bank, Five-Star Business Finance, Shriram Finance, HDFC Bank, and Max Financial Services, were owned by foreign investors.

Mid-day Mood: As investors remove money from the table, Sensex and Nifty trade lower for the second day.

Infosys Ltd.: Following the resignation of Chief Financial Officer Nilanjan Roy to pursue personal goals, the company's shares dropped 2.7% to Rs 1,439, a record low. Roy's resignation has hurt sentiment because it comes at a time when tier-I IT companies are experiencing a rise in the departure of top brass. Consequently, Infosys' American Depository Receipts (ADRs) decreased as well.

As of midday on December 13, the benchmark Sensex and Nifty maintained their losses from the previous session and were trading lower. Later today, investors are waiting for the US Federal Reserve to announce its monetary policy decision. They have been booking profits off of the recent stellar gains.

The Nifty was down 119.30 points, or 0.57 per cent, at 20,787.10, and the Sensex was down 383.87 points, or 0.55 per cent, at 69,167.16 around noon. 1,646 shares increased, 1,481 shares decreased, and 88 shares remained unchanged.

The broader market trend likewise stayed muted, with the Nifty Smallcap 100 and Nifty Midcap 100 indices exhibiting a flattish trajectory.

Sectoral Patterns

Automobile, infrastructural, and FMCG sectors remained muted due to the subdued market trend, while PSU banks, energy, metals, and banks traded with slight losses.

The information technology group continued to face pressure as a result of overnight losses in the Nasdaq Composite, which is heavy on technology. Among sectoral indices, the Nifty IT index suffered the most, falling more than 2 per cent.

The pharma index, which was trading slightly higher, was defying the trend.

Basic Perspective

"In spite of the tall valuations, there is a bullish undercurrent in the advertise for the close term. The advertise will stay strong due to the economy's development energy, DIIs' and retail investors' reliable buying, the FPI strategy's inversion from offering to buying, and great worldwide prompts, concurring to VK Vijayakumar, chief speculation strategist at Geojit Monetary Administrations.

Technical Perspective

The Nifty can find support at 20,900, 20,850, and 20,800 in that order. On the plus side, Choice Broking research analyst Deven Mehata noted that 21,020 could serve as an instant resistance, followed by 21,100 and 21,150.

According to the Bank Nifty's charts, support could come in at 47,000, 46,800, and 46,700. The first important resistance level to be aware of if the index rises is 47,250, which is followed by 47,500 and 47,600 "Mehata stated.

In the Spotlight

In November, US retail inflation increased by 0.1 per cent, as predicted by the market. The retail inflation rate increased by 3.1% year over year. In November, core inflation increased by 0.3 per cent, which was marginally higher than anticipated.

Key Nifty gainers

NTPC, Power Grid Corporation of India, Hero MotoCorp, Dr Reddy's Labs

Key Nifty losers

Infosys, TCS, HDFC Life, LTIMindtree

Key Sensex gainers

NTPC, Power Grid, IndusInd Bank

Key Sensex losers

Infosys, TCS, Bajaj Finserv

Stock moves

Adani Total Gas: As investors attempted to take advantage of the nearly 90% increase in the stock price over the previous month, shares fell by almost 10%.

Axis Bank: Following a Rs 3,465 crore block deal on the exchanges, shares dropped by more than 1%. Moneycontrol was unable to identify the buyers or sellers, but there were rumours that companies connected to Bain Capital were hoping to sell their stake through a block deal. Integral Investments South Asia IV, BC Asia Investments VII, and BC Asia Investments III may be among the sellers.

Sunteck Realty: Following a significant transaction in the counter valued at Rs 336.4 crore, the stock fell more than 5%.

Equitas Small Finance Bank: After a change in the company's top brass, shares increased by about 3%.

IPOs Coming Up in December 2023: A List of Them

New Delhi: As 2023 comes to an end, a number of companies that have been waiting for the right time to go public will finally announce their initial public offerings (IPOs). All of these companies have already filed their DRHPs to the market regulator, and many of them have already received the final approval.

To see the list of IPOs slated for December 2023, scroll down.

The IPO of Sheetal Universal

With its impending initial public offering (IPO), which is slated to begin on December 4, 2023, and end on December 6, Sheetal Universal is prepared to raise Rs 23.80 crore. The IPO, which has a minimum lot size of 2,000 scrips, is priced at Rs 70 per share. With a possible listing date of December 11, 2023, investors can expect the allotment results to be finalised on December 7, 2023.

The Graphisads IPO

Graphisads is currently taking investments through December 5, 2023, and has already opened for business on November 30, 2023. 48.12 lakh shares, valued at Rs 111 apiece, are offered in the IPO, which has a total market value of Rs 53.41 crore.

The minimum lot size for retail investors is 1,200 scrips, or Rs 1,33,200. December 8, 2023, is when allotment for this IPO is anticipated to occur. On December 13, 2023, the company may list on exchanges.

IPO for Marinetrans India

The subscription period for Marinetrans India's Rs 10.92 crore initial public offering (IPO) is November 30, 2023–December 5, 2023. The company hopes to list on the exchanges on December 11, 2023, and plans to complete the allotment on December 8, 2023.

With 42 lakh newly issued equity included in this offering, investors are closely monitoring it.

IPO for Net Avenue Technologies

56.96 lakh shares are up for grabs in an IPO priced at Rs 10.25 crore by Net Avenue Technology. Beginning on November 30, 2023, and ending on December 4, 2023, is the subscription window.

Investors can anticipate the allotment results on December 7, 2023, and a possible listing date on December 12, 2023, with a minimum lot size of 8,000 stocks priced at Rs 16–18 apiece.

Information Systems Q2 Results: Guideline Cut Again Despite Increase in Sales and Profit

Even as the larger Indian IT services industry prepares for a slowdown, Infosys Ltd. has cut its revenue growth projection for fiscal 2024 for a second time.

According to a filing with the market on Thursday, the revenue of the second-largest IT services company in India increased 2.8% over the prior three months to Rs 38,994 crore in the quarter ended in September. This contrasts with the Rs 38,503-crore analyst consensus forecast that Bloomberg tracks.

Infosys Q2 Results: Important Highlights (QoQ)

• Revenue increased by 2.8% to Rs. 38,994 crore from Rs. 37,933 crore (Bloomberg estimate: Rs 38,503 crore).
• EBIT increased by 4.8% to Rs. 8,274 crore from Rs. 7,891 crore (Bloomberg estimate: Rs 8,088 crore).
• EBIT margin was 21.20% as opposed to 20.80% (Bloomberg's expectation was 21%). Net profit increased by 4.5% to Rs. 6,215 crore from Rs. 5,945 crore (Bloomberg estimate: Rs 6,266.50 crore).
• Declared interim dividend of Rs. 18 per share.
• 14.6% versus 17.3% for the attrition rate.

In the July-September quarter, Infosys' sales increased 2.2% sequentially to $4,718 million. In constant currency terms, it increased by 2.3%.

The business has revised its constant currency revenue growth forecast for the fiscal year ending March 31, 2024 to 1-2.5%, down from 1%-3.5% at the end of the preceding quarter. In FY24, it intends to attain operating profitability of 20-22%.

According to Chief Executive Officer Salil Parekh, the IT giant achieved significant transaction wins worth $7.7 billion, its best ever for a quarter, on the back of demand spread across verticals and countries.

In a macroeconomic situation that is uncertain, he said, "This is a testament to our ability to pivot and stay relevant to evolving client needs, by delivering the benefits of transformation as well as productivity and cost savings at scale." "Strong H1 performance with significant large deal wins lays the groundwork for the future." Topaz's growing usage of Generative AI is assisting us in delivering continuous value and expanding market share."

Infosys is the market leader in India's $250 billion IT services industry, which is expected to stall as businesses in the United States and elsewhere cut down on technology to deal with rising interest rates and inflation. Russia's military campaign in Ukraine has also caused economic anxiety for firms.

Infosys, like its larger counterpart Tata Consultancy Services Ltd., is attempting to fuel development through higher-margin digital services.

On Thursday, Infosys shares lost 1.95% to Rs 1,464.55 per share on the BSE, while the benchmark Sensex fell 0.10% to 66,408.39 points. The quarterly results were released after the market closed.

Today's news about Adani Green Energy shares comes after a subsidiary commissions a solar power project in Bikaner.

Following the completion of the commissioning of the whole 150 MW solar power plant at Bikaner, Rajasthan, by the Adani Group company's wholly owned stepdown subsidiary Adani Solar Energy Jaisalmer Two Private Ltd., shares of Adani Green Energy Ltd. are in the news today. Shares of Adani Green Energy closed Friday's trading session 0.15% higher at Rs 960.75 compared to the previous BSE closing of Rs 959.30. The company's market value increased to Rs 1.52 lakh crore. A total of 0.19 lakh shares were exchanged, totaling Rs 1.83 crore in turnover.

In the previous session, the opening price of the Adani Green Energy shares was higher at Rs 960. Shares of Adani Green Energy have dropped 49.14 percent since the start of this year and 56.38 percent over the past year. The stock's beta in the most recent year was 0.9, indicating modest volatility. On November 9, 2022, the large-cap stock reached a 52-week high of Rs 2259.15, and on February 28, 2023, it reached a 52-week low of Rs 439.35.

Technically speaking, Adani Green Energy's relative strength index (RSI) is at 39.4, indicating that the stock is neither overbought nor oversold. Shares of Adani Green are now trading below the 150-day moving averages, but above the 5-20-50-100-200-day moving averages.

The project has been given the go-ahead to manufacture its own electricity for sale to consumers or on power exchanges.

Zomato surges 72% this year, nears 52-week high on ICC World Cup booster

Zomato share price has soared around 67 percent in the past one year. Technicals show that the relative strength index of the stock stands at 61.3, implying that it's trading neither in the overbought nor in the oversold territory

 The share price of Zomato jumped around 2.5 percent on Tuesday to an intraday high of Rs 104.30 on the NSE amid positive outlook on account of the ICC Men's World Cup 2023. The stock has rallied over 70 percent so far this year, and is just shy of its 52-week high of Rs 105.

Zomato could be the biggest beneficiary of the World Cup in the post-Covid era, said Karan Taurani, Senior Vice President - Research Analyst at Elara Capital, said in an interview with CNBC-TV18.

“If you look at the market share numbers over the last 3-4 years, pizza has lost market share as a category within the overall QSR chain. It's a win-win for burger, fried chicken for aggregators like Zomato, over the near to medium-term,” Elara Capital's research analyst said.

ICC World Cup boost 

According to Taurani, during World Cup 2011 and 2019, Jubilant FoodWorks, operator of Domino's Pizza in India, would have been the biggest beneficiary because of its best user experience in terms of delivery. This time, however, he believes  that Zomato could be the one. “We have seen adoption wherein delivery of food has moved to other categories and not just pizza. Zomato is able to replicate or even do better as compared to Jubilant in terms of the overall delivery experience.”

Increased orders and restaurant partnerships

According to brokerage firm Motilal Oswal, Zomato, as an online food delivery platform, may experience increased orders and restaurant partnerships during the ICC World Cup, especially for home-viewing parties. They can leverage marketing campaigns and special offers to attract more users.

Zomato Technicals

The Zomato stock has soared around 67 percent in the past one year. Technicals show that the relative strength index (RSI) of the stock stands at 61.3, implying that it's trading neither in the overbought nor in the oversold territory.

The one-year Beta of Zomato stands at 1.61, implying very high volatility. The stock is trading above its 5-day, 10-day, 20-day, 50-day, 100-day and 200-day moving averages, according to Trendlyne data.

Dhanlaxmi Bank zooms 12% on robust quarterly update

 

Dhanlaxmi Bank soared stock over 12 percent in afternoon trade on October 3 after the lender posted a robust quarterly update, sparking hopes of strong earnings performances in the September quarter.

Total deposits for the lender rose 8.2 percent in July-September to Rs 13,789 crore, up from Rs 12,748 crore in the same quarter of the previous fiscal.

Gross advances also grew 13.2 percent to Rs 10,312 crore as against Rs 9,109 in the corresponding quarter of the base fiscal.

The update triggered hopes of healthy earnings in the September quarter, which prompted investors to lap up shares of Dhanlaxmi Bank.

At 12.54 pm, Dhanlaxmi Bank was trading 11.5 percent higher at Rs 32.50 on the National Stock Exchange.

The uptick in the stock price was also accompanied by strong volumes, as one crore shares had changed hands by early afternoon, significantly higher than the one-week daily traded average of 22 lakh shares.

The stock has also been a multibagger, delivering nearly 170 percent returns in the past year as it rode on the bullish wave seen across the PSU bank sector.

Regardless, the lender was caught in a controversy in September when independent director Sridhar Kalyanasundaram stepped down from his position. He cited concerns regarding the unethical conduct of the bank's operations and internal factionalism among the board members, among other issues.

Kalyanasundaram also pointed out that the bank's board had received numerous complaints, both anonymous and signed but had consistently chosen to dismiss them as "the habit in this bank over time".