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January 08, 2025

Navigating the Opening Bell with Sbi Securities: 6 Key Technical and Derivative Insights
Nifty Forms Inside Bar, Support at 23570
1. Global Market:
On Tuesday, all three major US indices faced a downturn as rising treasury yields sparked concerns over the interest rate outlook. The tech-heavy #Nasdaq dropped 1.79%, the S&P 500 declined 1.11%, and the #Dow fell 0.42%.
Going ahead, the 100-day EMA zone of 5820-5800 will act as crucial support for the S&P 500. While, on the upside, the zone of 5990-6010 will act as an immediate hurdle for the index.
On Tuesday, the #BrentOil ended above $77 level with a gain of 1.25 percent. Going ahead, any sustainable move above the level of $77.50 will lead to a sharp upside rally upto the level of $79.
For the second consecutive trading session, the U.S. Dollar Index (#DXY) has taken support near its 20-day EMA level and thereafter witnessed a smart rebound. Going ahead, any sustainable move above the level of 109.20 will lead to a sharp upside rally in DXY.
2. Nifty View:
After Monday’s sharp sell-off, the benchmark Nifty took a breather on Tuesday, closing at 23708 with a 0.39% gain. On the daily chart, the index has formed an Inside Bar pattern.
Going ahead, the zone of 23590-23570 will act as immediate support for the index. If the index slips below the level of 23570, then the recent swing low of 23460 will act as the next crucial support for the index.
While, on the upside, the resistance shifted lower in the zone of 23800-23830 level.
On the #derivatives front, January #futures surged by 0.31 percent, while the combined #OpenInterest for the current, next, and far series also surged by 2.19 percent.
Among the constituents of the #Nifty index, 17 stocks have witnessed a long build-up, and 18 stocks have witnessed a short covering rally. While 9 stocks have witnessed a short build-up, and 6 stocks have witnessed a long unwinding.
The 23800 strike has significant call open interest, followed by the 24000 strike. On the put side, 23700 has a substantial open interest, followed by a 23500 strike.
For the weekly series, OI PCR is at 0.69. For the January monthly series, it is at 1.15.
Bank Nifty also paused on Tuesday following Monday’s sharp decline. Going ahead, the zone of 49800-49700 will act as a crucial support for the index. Any sustainable move below the level of 49700 will lead to a sharp correction upto the 49300 level.
3. Sensex View:
On the weekly expiry day, the benchmark index #Sensex saw a minor pullback but traded within a narrow 527-point range. The index closed near the 78200 level, posting a gain of 0.30%.
Going ahead, the zone of 77800-77700 will act as immediate support for the index. Any sustainable move below the level of 77700 will lead to further correction in the index upto the 77300 level.
While, on the upside, the resistance shifted lower in the zone of 78500-78600 level.
On the #derivative front, January #futures surged by 0.26 percent, and the #OpenInterest of the current series has also surged by 2.68 percent.
The 78200 strike has significant call open interest, followed by the 78500 strike. On the put side, 78000 has a substantial open interest, followed by a 77500 strike.
For the weekly series, OI PCR is at 0.84.
4. Key Market Indicators:
The volatility index, India #VIX, dipped by over 6 percent on Tuesday. However, it is still trading above its short and long-term moving averages. Going ahead, any sustainable move above the level of 15.60-15.70 will lead to resume its northward journey.
The #Advance/Decline ratio was largely tilted in favor of advancers.
5. Key Sectors:
Technically, Nifty Metal, Media, Oil & Gas, CPSE, and PSE space are likely to underperform in the short term.
6. FII/DII Data:
#FIIs sold to the tune of 1491.46 cr. while #DIIs bought to the tune of 1615.28 cr.
FIIs' #Long-short ratio for index futures is at 19.8 as on a net basis, they bought 1460 index futures.
On the stock #futures front, FIIs have bought to the tune of 34010 contracts, while on the #Options Front, FIIs sold 61307 call contracts and 65981 Put Option contracts.
Is global growth becoming scarce ?
UK Housing Market cracks as home prices fall for the first time in 9 months.
UK long-term borrowing costs hits highest level since 1998
Euro Zone PMI Manufacturing stood at 45.1 in Dec vs. expectations of 45.3. It was the sharpest decline in manufacturing activity in three months to extend the ongoing two-year contractionary streak.
US 10 year yield at 4.68. In the short run, an increase in tariff will lead to a rise in price and fall in the output.
These are the stocks to watch out for ahead of Wednesday's trading session:
F&O Changes: NSE to introduce F&O contracts for Castrol India, Gland Pharma, NBCC, Phoenix Mills, Solar Industries and Torrent Power with effect from January 31, 2025.
M&M: Announces prices for top variant of BE 6 and XEV 9e at ₹26.9 lakh and ₹30.5 lakh respectively. Phased test drives to begin from January 14, bookings to begin from February 14 and deliveries to commence from March 2025.
Tata Steel: India production in Q3 up 6.2% to 5.68 MT. Deliveries up 8.4% to 5.29 MT.
Sobha: Total sales value down 28.9% in Q3 to ₹1,388.6 crore. Average price realisations up 16.5% year-on-year to ₹1,366.3 square feet.
Berger Paints: Continue to evaluate inorganic growth opportunities as part of regular course of business but there is no material event at present that warrants a disclosure.
Dr. Reddy's Laboratories: Arm signs agreement with Jaguar Labs Holdings to sell manufacturing facility in Louisiana
RVNL: Signs MoU with Dubai's GBH International Contracting LLC to explore business opportunities in the Civil Infra sector in GCC Countries.
Exicom Tele-Systems: Partners with Mufin Green Infra to drive the expansion of EV charging solutions in India.
Tata Technologies: Signs a strategic MoU with Telechips o innovate solutions for next-generation software-defined vehicles.
CESC: Issues LoA to arm Purvah Green Power to set up 150 MW of Wind-Solar Hybrid Power Project. The LoA also includes a greenshoe option to set up an additional 150 MW of Wind-Solar Hybrid Power Project.
Jindal Worldwide: Announces the issue of four bonus shares for every one share held.
India Daybook – Stocks in News
Tata Technologies: Company and Telechips signs a strategic MoU to innovate solns for next-gen software-defined vehicles (SDVs). (Positive)
Exicom: Company partners with Mufin GreenInfra to drive the expansion of EV Charging Solutions in India (Positive)
RVNL: Company signs MoU with Dubai’s GBH International Contracting LCC to explore business opportunities in civil infra sector in GCC countries (Positive)
Maruti: Company announces its blueprint for electric mobility, christened ‘e For Me’ (Positive)
UniHealth Hospitals: Company announced the launch of its first multi-specialty hospital in Navi Mumbai, India (Positive)
SPP Polymer: Company has signed an MOU with the Uttar Pradesh government to set up a new project with an investment of around Rs 50 crores. (Positive)
Power Finance: SPV Company Incorporated As Subsidiary of PFC Consulting (Positive)
Mazda Ltd: Company announces a stock split, one share will be split into five shares and Record date will be 28th January 2025. (Positive)
IKIO lighting: Company has formed a joint venture with AG Investment Holdings and others to expand market reach and accelerates business growth (Positive)
Ceinsys Tech: Company rebrands to CS Tech AI, embraces AI-driven future (Positive)
WPIL: Company announced the acquisition of Misa S.R.L., an Italian company, by its European subsidiary, Gruppo Aturia. (Positive)
NTPC: Company incorporates Wholly Owned Subsidiary for Nuclear Energy (Positive)
Tata Steel Q3: India production rises 6%, deliveries at record levels (Positive)
Jindal Worldwide: Board approves bonus issue of 4 shares for every 1 share held (Positive)
CESC: Company awards contract for 150 MW Wind-Solar Hybrid Power Project. (Positive)
Oil upstream stocks: Crude oil prices firming up to $77/ barrel (Positive)
Ola Electric: Karnataka High Court grants six weeks extension to Ola Electric to submit response on CCPA seeking additional docs (Neutral)
Signature Global: Company appoints Sanjeev kumar Sharma as CFO of the company w.e.f January 7 (Neutral)
SBI: Bank appoints Baldev Prakash as DMD and Group Chief Risk Officer of the bank (Neutral)
Adani Power: Care Ratings Limited has assigned a CARE AA: Stable credit rating to its proposed Rs 5,000 crore Non-Convertible Debentures (Neutral)
Adarsh Mercantile: Company announced the resignation of its Company Secretary, Ms. Radhika Mayaramka, and effective February 1, 2025. (Neutral)
Supreme Facility Management: Company announced the appointment of Mr. Anshuman Singh Tomar as its Company Secretary and Compliance Officer, effective January 7, 2025. (Neutral)
Hindustan Zinc: ICRA assigned an A1+ rating to its ₹5,000 crore commercial paper. (Neutral)
COSMO First: Company announced the appointment of Mr. Neeraj Kumar Sharma as Vice President- Taxation and Corporate Affairs, effective January 7, 2025. (Neutral)
Wisec Global: Company appointed Mr Devendra Singh as its new Chief Financial Officer, effective January 7, 2025. (Neutral)
Orissa Minerals Development: Company Suspends Chief Financial Officer Ramakanta Behera (Neutral)
Vedanta Ltd: Company received an order from the tax authority in Ahmedabad for a penalty of Rs 2.24 cr for excess credit availment and failure to reverse ITC (Neutral)
Transchem Ltd: Company announced the resignation of its CFO, Mr Mukesh Garach, and effective January 7, 2025. (Neutral)
Equinox India: Company secures NCLAT approval for merger with Embassy Group entities. (Neutral)
Purvankara: Company appoints Deepak Rastogi as the group CFO of the company w.e.f January 15. (Neutral)
Berger Paints: No material event or development to disclose in the matter of Akzo Nobel stake buy report (Neutral)
Escort Kubota: Company announced the appointment of Mr. Kohei Kawabe as Chief Officer of the Engine Business Division (Neutral)
*ICICI Lombard:*GDPI decline of 1% YoY vs -3% MoM (Neutral)
*Go Digit:*GDPI growth of 6% YoY vs -4% MOM (Neutral)
Kotak Inst Eqt on Renewable energy
Initiate Sell on Waaree Energies – TP Rs 2550
Initiate sell on Premier Energies – TP Rs 770
Believe India’s solar sector is primed for growth with an 18% CAGR in utility scale solar capacity additions until FY2030
Cos are well-positioned for strong growth in domestic & US markets, aided by trade/non-trade barriers
Over medium term, believe integrated manufacturers & cos with local US manufacturing presence would continue to enjoy a competitive advantage
Waaree Energies - Forecast 35% PAT CAGR over FY2024-30E
Premier Energies - Expect 44% PAT CAGR over FY2024-30E
SELL Call due to elevated valuations
Nuvama On DOMS
Buy Call, Target At Rs3,210/Sh
Demand Is Recovering & Co’s Capacities Remain Optimally Utilised
Confident Of Core Business Revenue Growth Of 20% YoY In FY25
Consolidated Revenue To Grow 23–25% In FY25
Uniclan Revenues To Jump Post Addition Of A Third Line; EBITDA Margin To Stay Within 5–7%
New Pencil Capacities To Come On Stream Partially In Q4FY25 & Fully In Q1FY26
EBITDA Margin Likely To Be 17–17.5% In FY25
Given Low-Margin Guidance, Cutting FY25/26/27 EPS By 3%/6%/7%
B&K on CarTrade
Initiate Buy with TP of Rs 1878
The perfect classifieds play
Cash cow with re-investment arenas
OLX has a potential to be a game changer
Ambit on Akums Drugs
Initiate Buy with TP of Rs 840
Alternative play on India opportunity
Leveraging strengths to build scale in new businesses
Current earnings weakness is transient, growth to step-up from FY26
Valuation discount to peers
Jefferies on Auto
Remain positive on Indian autos; With preference for 2Ws and tractors over PVs and trucks. Valuations are not cheap
Believe premium multiples should sustain for companies with better growth outlook and strong or improving franchise.
Over FY25-27, Expect 2-wheeler & Tractor Volumes To Grow At 13-15% CAGR
Over FY25-27, Expect 2-wheeler & Tractor Volumes Outpacing 5-8% For PVs & Trucks
M&M Is Gaining Share Across Tractors, PVs & LCVs
TVS Motor Has Gained In Both Domestic And Export 2-wheelers In Recent Years
Our preferred buys are Mahindra & Mahindra, Eicher Motors and TVS
Buy Call On Bajaj Auto, Target Cut To Rs10,350/Sh From Rs13,400/Sh
Buy Call On Hero Moto, Target Cut To Rs4,900/Sh From Rs5,500/Sh
Buy Call On Eicher Motors, Target Raised To Rs6,600/Sh From Rs5,500/Sh
Buy Call On M&M, Target Raised To Rs4,075/Sh From Rs3,700/Sh
JPM on Financials
Policy to get supportive.
Deposit and credit growth gap has converged, leading to reduced LDR focus
3Q likely to see higher unsecured credit costs.
Cards/PL likely to peak. MFI could take a while to come back
Key themes: 1) Capex over consumption, 2) Saver to investor and 3) Policy easing
Top picks for 2025-positive EPS revisions (SBI/ Bank Of Bardia/ PNB), followed by ICICI Bank/ Kotak Mahindra Bank (higher growth)
Capital market intermediaries HDFC AMC (saver to investor).
NBFCs we like LIC Housing Finance and Shriram Finance (secured lenders).
CLSA on Financials
2025 will be a year of two halves for Indian banks
Credit costs in the first half will be slightly higher due to unsecured credit
Should normalise in the second half due to underwriting tightening by the system over the past year.
Believe the pain in microfinance will be severe, but not as long as other crises like demonetisation/Covid.
Do not foresee any large contagion effect from unsecured loans to other products.
Probable repo rate cut by RBI in Feb or April would temporarily compress NIM
Expect credit growth to marginally pickup from an estimated 10-11% in FY25 to 12-13% in FY26.
Proposed LCR and project funding guidelines and the ECL framework are key things to look out for.
Like ICICI Bank and Bajaj Finance as stable compounders and IndusInd Bank as a high-beta player
HDFC Bank-Maintain Hold, TP 1785
ICICI Bank-Maintain Overweight, TP 1600
Jefferies on Reliance
Maintain Buy, TP 1690
Valuation is cheapest since the Covid shock of Mar-20
RIL underperformed Nifty by 15% in CY24
Concerns around the medium-term growth prospect of Retail and lower earnings growth in FY25.
See restoration of mid-teens growth in Retail, likely listing of Jio and improvement in O2C profitability in FY26E.
Project 14% Ebitda growth in FY26 with all segments contributing.
Bernstein on Reliance
Maintain Outperform, TP 1520 (25% Upside)
Believe 2025 will see a recovery cycle
Expect earnings growth to be led by Telecom & Retail, while refining margins see a rebound
Jio ARPU increase of 12% (w/o tariff hikes) and subscriber addition of 4-5%
Retail to revert to double-digit EBITDA growth
Increase in GRM margins (after a decline from $9/bbl in FY24
HSBC On Bharti Airtel
Buy Call, Target At Rs1,940/Sh
Expect Dividend To Rise By 114% YoY To Rs17/Sh In FY25 As FCF Outlook Improves
Cash Flow Needs At Promoter Entity Rise
Estimate Dividend/Sh To Quadruple In 3 Years To Rs34 In FY27
Dividend/Sh Estimates Are 28-45% Ahead Of Consensus For FY25-27
Growth Levers Are Intact: Rising Mobile ARPU, Expanding Home Broadband Subs & Rising FCF
GS on ITC
Maintain Buy, TP 500
Steady recovery in cigarette business profit growth
Improving profitability and scale of the FMCG business
ITC’s cigarette business is likely to deliver healthy earnings’ growth over FY23-25E
Stable tax regime of 5-7% annual cigarette tax increases
In the FMCG business-see strong growth potential for ITC’s brands
FMCG EBITDA margin expanding to ~12% by FY27E from ~9% in FY22
Macquarie on HDFC Bank
Maintain Outperform, TP 1900
Intended listing of HDB Financial Services to have little impact
calculations suggest a ~1%-3% impact to HDFC Bank's market price.
ROA in 1HFY25 has been dampened by higher credit costs and lower BPO services revenues.
Draft RBI regulations on the overlap of similar businesses create an overhang
Could thus affect HDB and HDFC Bank SOTP valuations.
Jefferies on GAIL
Maintain Buy, TP 235
Should gain share in transmission on the back of two major pipelines commissioning in FY26.
India's gas demand outlook remains robust; Favourable risk-reward
See the likelihood of a rerating of the transmission business if a tariff hike ensues by Mar-25.
Outlook on trading profitability is constructive in 2025
Project 9% EBITDA CAGR over FY24-27E
Emkay on PAYTM (Analyst Meet)
Expects to regain its earlier high of 100mn MTU, latest by the next 12-18M
Witnessing positive results following the NPCI approval
New merchant onboarding and the GMV growth to pick up in Q3FY25 due to the festive season
Paytm and its lending partners are adopting a cautious approach to fresh lending
Turn EBITDA-positive (ex-ESOP and UPI incentive) by Q4FY25, and net profit positive in the medium term
Temporary slowdown expected in wealth-management business
Nuvama On Dr Reddy’s
Upgrade To Buy Call, Target At Rs1,553/Sh
Revlimid Patent Expiry In 2026 Poses A Significant Threat To Earnings Growth
Revlimid Drug Contributed 40% To Co’s FY24 EBITDA
Observe Management Has Mapped Out Strategies To Mitigate Impact Of Revlimid Loss
Key Asset Launches Of Drugs In Canada & US Are Expected To Largely Offset Revenue Loss
Reckon Proactive Measures Shall Mitigate About 80% Of The Expected EBITDA Impact
Macquarie On Zydus Life
Outperform Call, Target At Rs1,365/Sh
Specialty Portfolio Progress Bodes Well
Co’s New Drug Application For CUTX-101 For Menke's Disease Has Been Accepted By US FDA
Co Has Entered Into An Agreement With CVS Health To Include Its Branded 505(B)2 Products
Believe Co Has A Good US Generic Pipeline Supplemented By A Strong Speciality Pipeline
Citi On Kalyan Jewellers
Buy Call, Target At Rs810/Sh
Q3 Update Shows Continues Outperformance On Growth
Management Expects To Add 30 ‘Kalyan’ & 15 ‘Candere’ Stores In India In 4QFY25
90 ‘Kalyan’ & 80 ‘Candere’ Stores Are Expected In India In FY26
Jefferies On Oil & Gas
Reliance Ind Should See Restoration Of Mid-teens Growth In Retail In FY26
Project 14% EBITDA Growth In FY26 With Valuation Cheapest Since COVID
ONGC Is Attractive With Production Growth & Pricing Reform
Production Growth & Pricing Reform For ONGC Led
Improved Profitability In FY26 & Trading Cheap
GAIL's Healthy Vol Growth & Likely Re-rating From Potential Tariff Hike Keeps It In Preferred List
Prefer BPCL Amongst OMCs, Maintain Underperform Call On CGDs
Fund Houses Recommendations
GS on ITC: Maintain Buy on Company, target price at Rs 500/Sh (Positive)
HSBC on Bharti Airtel: Maintain Buy on Company, target price at Rs 1940/Sh (Positive)
Citi on Kalyan Jewel: Maintain Buy on Company, target price at Rs 810/Sh (Positive)
Bernstein on Zydus Life: Maintain Outperform on Company, target price at Rs 1365/Sh (Positive)
Jefferies on GAIL: Maintain Buy on Company, target price at Rs 235/Sh (Positive)
Jefferies on M&M: Maintain Buy on Company, target price at Rs 4075/Sh (Positive)
Jefferies on Eicher Motors: Maintain Buy on Company, target price at Rs 6600/Sh (Positive)
Jefferies on TVS Motors: Maintain Buy on Company, target price at Rs 3050/Sh (Positive)
Jefferies on Reliance Ind: Maintain Buy on Company, target price at Rs 1690/Sh (Positive)
Macquarie on HDFC Bank: Maintain Outperform on Bank, target price at Rs 1900/Sh (Positive)
Nuvama on Dr Reddy’s Lab: Upgrades to Buy on Company, target price at Rs 1553/Sh (Positive)
Nuvama on DOMS: Maintain Buy on Company, target price at Rs 3210/Sh (Positive)
JM Fin on Bajaj Finance: Maintain Buy on Company, target price at Rs 8900/Sh (Positive)
JM Fin on SBI Life: Maintain Buy on Company, target price at Rs 1880/Sh (Positive)
JM Fin on Gravita: Maintain Buy on Company, target price at Rs 3200/Sh (Positive)
JM Fin on Britannia: Maintain Buy on Company, target price at Rs 6050/Sh (Positive)
JM Fin on Larsen: Maintain Buy on Company, target price at Rs 4400/Sh (Positive)
JP Morgan on Financials: Supportive policy, EPS upgrades likely for SBI, BoB, PNB. Capex over consumption theme. (Positive)
Jefferies on Auto: Remain positive on Indian autos; prefer 2Ws & tractors over PVs & trucks. (Positive)
Emkay on Paytm: Targeting 100mn MTU in 12-18M. Positive post-NPCI approval, GMV growth to rise by Q3FY25. (Neutral)
Bernstein on Reliance Ind: Maintain Outperform on Company, target price at Rs 1520/Sh (Neutral)
Jefferies on Hero Motocorp: Maintain Buy on Company, cut target price at Rs 4900/Sh (Positive)
Jefferies on Bajaj Auto: Maintain Buy on Company, cut target price at Rs 10350/Sh (Positive)
Citi on Info edge: Maintain Buy on Company, target price at Rs 8850/Sh (Neutral)
Citi on Nuvoco: Maintain Sell on Company, target price at Rs 300/Sh (Negative)
Few Companies With Order Book
1) L&T: 4,70,000 Cr
2) BHEL: 1,60,000 Cr
3) HAL: 95,000 Cr
4) NBCC: 85,000 Cr
5) BEL: 75,000 Cr
6) NCC: 52,500 Cr
0) Sumitresearch
7) KEC Intl: 42,500 Cr
8) Mazagon Dock: 37,000 Cr
9) Siemens: 21,600 Cr
10) Sona BLW: 21,500 Cr
11) Cochin Ship: 21,400 Cr
12) Patel Engg: 19,100 Cr
13) BEML: 15,100 Cr
14) HCC: 14,700 Cr
15) EIL: 11,500 Cr
CLSA ON INDIAN FINANCIALS
2025 will be a year of two halves for Indian banks
Credit costs in the first half will be slightly higher due to unsecured credit
Should normalise in the second half due to underwriting tightening by the system over the past year.
Believe the pain in microfinance will be severe, but not as long as other crises like demonetisation/Covid.
Do not foresee any large contagion effect from unsecured loans to other products.
Probable repo rate cut by RBI in Feb or April would temporarily compress NIM
Expect credit growth to marginally pickup from an estimated 10-11% in FY25 to 12-13% in FY26.
Proposed LCR and project funding guidelines and the ECL framework are key things to look out for.
Like ICICI Bank and Bajaj Finance as stable compounders and IndusInd Bank as a high-beta player
HDFC Bank-Maintain Hold, TP 1785
ICICI Bank-Maintain Overweight, TP 1600
JEFFERIES ON AUTO
Remain positive on Indian autos
With preference for 2Ws and tractors over PVs and trucks.
Valuations are not cheap
Believe premium multiples should sustain for companies with better growth outlook and strong or improving franchise.
Our preferred buys are Mahindra & Mahindra, Eicher Motors and TVS
M&M-Maintain Buy, TP 4075
Eicher Motors-Maintain Buy, TP 6600
TVS-Maintain Buy, TP 3050

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