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Nifty and Sensex opened flat on December 6 as investors awaited the RBI MPC meeting outcome. While auto and FMCG stocks gained, IT and realty sectors weighed down the indices. The Sensex fell 61 points to 81,704.86, and Nifty dropped 19.90 points to 24,688.50, with a mixed market breadth.
Motilal Oswal Wealth Management identifies five key stocks poised to benefit from the upcoming wedding season, predicting a 10-15% upside over the next 3-6 months. The sectors highlighted include Jewellery, Retail, Hotels, and Automotive, with an estimated business of Rs 6 lakh crore from 48 lakh weddings during the November-December period. The selected stocks are Titan, Eicher Motors, Vedant Fashion, Safari, and Lemon Tree.
Indian equity markets ended a seven-day losing streak on November 19, with the Nifty closing at 23,518.50, up 64.70 points or 0.28%. Key gainers included M&M, Trent, and HDFC Bank, while SBI Life Insurance and Reliance Industries were among the top losers. The market was closed on November 20 for Maharashtra Assembly polls, with sectors like media, auto, and realty showing gains, while metal and oil & gas sectors declined.
A significant trend has emerged where stocks entering the Nifty 50 are considerably more expensive than those exiting. With 45 stocks approved for the F&O segment, Zomato and Jio Financial Services are likely to join the index by March, despite their high trailing P/E ratios of 307x and 118x, compared to Eicher Motors and BPCL"s 25.5x and 9.9x, respectively. Since FY18, inclusion stocks have had a P/E of around 60x, six times higher than the median P/E of exclusion stocks at approximately 10x.
Sudeep Shah, Head of Technical and Derivative Research at SBI Securities, is bullish on Indian Hotels Company and Zomato, noting both stocks are above key moving averages. Indian Hotels is near all-time highs, while Zomato has rebounded strongly above its 20 and 50-day EMA levels. Shah warns that a sustained move below the BSE Sensex's 200-day EMA zone could trigger a sharp correction in the index.
Motilal Oswal has reiterated a "Sell" rating on Eicher Motors, setting a target price of INR 4,000, citing a disappointing 2QFY25 performance with a 90bp YoY margin contraction to 25.5% due to increased expenses. While VECV outperformed industry growth, it did so at the cost of margins, which fell 70bp YoY to 7.1%. The management plans to prioritize demand generation over margin recovery, leading to a revised outlook of slower earnings growth.
Eicher Motors reported a 3.6% YoY increase in consolidated revenue for Q2FY25, though it fell short of estimates. While gross profit rose by 4.6% and PAT margin expanded to 25.8%, EBITDA remained flat due to increased promotional expenses. The company maintains a positive outlook, driven by new model launches and growth in the export market, prompting a "Buy" rating with a target price of Rs 5,299.
Nifty successfully defended the 23,500 mark during a rangebound trading session, with particular attention on Eicher and Varun Beverages. Market participants are keenly observing these stocks as the trading day progresses.
Eicher Motors Ltd reported muted Q2 FY25 results, primarily due to sluggish volume growth for Royal Enfield amid a macroeconomic slowdown. Despite this, the domestic demand outlook remains positive for the medium to long term, while export markets are challenging. The stock trades at a premium to its fair value, suggesting a strategy of accumulation on corrections.
Muthoot Finance reported a 26.25% increase in standalone profit to Rs 1,251.14 crore for Q2 FY25, with revenue from operations rising 34.57% to Rs 4,117.44 crore. In contrast, Surya Roshni faced challenges, posting a 55.06% profit drop to Rs 34.16 crore amid seasonal and geopolitical pressures, despite a focus on operational efficiency and market expansion.
Eicher Motors Limited
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The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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