Category: Market Updates

Following a two-day meeting of the Federal Open Market Committee (FOMC), the US Federal Reserve announced its sixth policy decision for 2024 on September 18. The Fed cut the benchmark interest rate by 50 basis points (bps), or ½ of a percentage point, to 4.75 percent to 5 percent for the first time in four years, largely in line with Wall Street estimates.

 In order to reach a range of 2.75 percent to 3.00 percent, US Fed policymakers anticipate that the benchmark interest rate would drop by an additional half-point (50 bps) by the end of this year, another full percentage point in 2025, and a final half-point in 2026. One tenth (1/100) of a percentage point is equivalent to one bps.

From a peak of 9.1% in mid-2022 to a three-year low of 2.5% in August—just beyond the US Federal Reserve’s two percent target—US inflation has plummeted. US Federal Reserve officials have been concentrating on helping a contracting labour market and accomplishing a unique “soft landing,” which lowers inflation without precipitously slowing down the economy, as a result of inflation only marginally exceeding their goal level. 

The rate-setting panel headed by Fed Chair Jerome Powell unanimously decided to maintain the policy rate at the 23-year high, between 5.25 and 5.50 percent, at its previous meeting. In an effort to reduce inflation in the greatest economy in the world, the US central bank kept borrowing rates constant for a record 14 months running.

The central bank has kept the policy rate on hold since July 2023 in order to anchor in high inflation and steadily lower it towards the two percent target range. The central bank raised the rate by 5.25 percentage points since March 2022, one of the fastest Fed responses to counter the worst inflation outbreak in 40 years.

Shares of Vodafone Idea have declined as much as 15% on Thursday after the Supreme Court upheld the Adjusted Gross Revenue ruling against the telecom companies and upheld the quantum of the AGR demand.

Vodafone Idea’s AGR dues currently stand at ₹70,300 crore.

Bajaj Housing Finance shares will be listed on the NSE and the BSE on Monday at 10 am.

Bajaj Housing Finance shares will be listed on the NSE and the BSE on Monday at 10 am.

In Wednesday’s trading session, Tata Motors Ltd.’s shares resumed their declining trend and fell below the crucial Rs. 1,000 barrier. At the close of business, the shares fell 5.83 percent to Rs 975.05. Its current price is a 17.30% decrease from its peak value of Rs 1,179.05, which was reached on July 30, 2024.

10.95 lakh shares of the scrip were spotted crossing hands on the BSE today, indicating a high trading volume for the stock. The amount was double the 4.23 lakh share two-week average volume. With 108.14 crore in turnover, the counter had a market capitalisation (m-cap) of Rs 3,59,834.89 crore.

UBS, a global broking, kept its “Sell” recommendation on the stock with a target price of Rs 825 per share. Given that JLR’s order backlog is already lower than it was before COVID-19 struck and that incremental bookings are trailing supply, we wouldn’t be shocked if the incentives for Range Rover, the company’s top model, quickly begin to rise from almost no levels. Even if consensus extrapolates the prior two years’ performance, rising discounts, decreasing growth, and the absence of any new ICE/hybrid launch might lead to much poorer financials for FY26, according to UBS analysts.

After hitting all-time highs, Tata Motors shares have been going through a consolidation phase. The growth in dealership inventories, which may have an impact on margins, is one of the main worries for auto OEMs in the medium- to short-term, according to WealthMills Securities Director of Equity Strategy Kranthi Bathini.

This accomplishment comes after solar modules were produced successfully earlier in the year. Tata Power Company is the parent company of TPREL. Tata Power stated in a BSE filing that the manufacture of solar cells, which is now at a capacity of 2 GW, will improve the company’s ability to meet the growing demand for high-quality, domestically produced solar components, particularly for large-scale capacity-addition projects. As to the statement from the Tata group company, “the plant is expected to ramp up production with the remaining 2 GW capacity to be added over the next 4-6 weeks, reaching peak production within the next few months.”

The Tirunelveli plant’s module production line, which has a 4.3 GW total cell and module manufacturing capacity, was put into service in October 2023 and has since produced 1250 MW of solar modules.

Tata Power has invested close to Rs 4,300 crore in the facility’s construction. In order to enhance the company’s supply chain, the solar cells and modules made at the Tamil Nadu facility will first be used for ongoing projects. Tata Power also intends to look into ways to reach a larger market.

The company now has a manufacturing facility in Bengaluru, Karnataka, in addition to the Tirunelveli plant. 682 MW of solar modules and 530 MW of solar cells can be produced at this facility. It has provided 3.73 GW in total so far.

What Happened: The rally was held in conjunction with the Defence Acquisition Council’s (DAC) approval of significant purchases for the Indian Armed Forces valued at ₹1.44 lakh crore. These purchases include new fast patrol vessels and next-generation offshore patrol vessels for the Indian Coast Guard, future ready combat vehicles (FRCVs), air defence fire control radars for the Army and Dornier 228 aircraft, and more.

Ten capital acquisition proposals received an acceptance of need (AoN) during the Tuesday meeting of the Defence Acquisition Council (DAC), which was presided over by Defence Minister Rajnath Singh. Reiterating the government’s emphasis on self-reliance in defence, 99% of these acquisitions will come from Indigenous producers under the “Buy (Indian)” and “Buy (Indian-Indigenously Designed Developed and Manufactured)” groups.

The protracted defence procurement process, in which the AoN is the first step, has begun with the DAC’s approvals. Although the granting of an AoN is essential, it does not ensure a final order because other examination and negotiation steps are needed.

Price Action: Here is how defence stocks trade on Wednesday morning:

Shares of MTAR Technologies Ltd rose slightly by 0.03% to ₹1,807.85.

Shares of Zen Technologies Limited were up 0.18% to ₹1,680.55.

Shares of Hindustan Aeronautics Ltd increased by 0.28% to ₹4,845.70.

Shares of Bharat Electronics Ltd gained 0.52% to ₹298.70.

Shares of Data Patterns (India) Ltd were up 0.86% to ₹2,760.70.

Shares of Bharat Dynamics Ltd increased by 0.96% to ₹1,332.90.

Shares of BEML Ltd rose by 1.10% to ₹3,892.95.

Shares of Cochin Shipyard Ltd were up 1.21% to ₹1,904.05.

Shares of Paras Defence and Space Technologies Ltd increased by 1.52% to ₹1,263.00.

Shares of Mazagon Dock Shipbuilders rose by 1.74% to ₹4,531.80.

Shares of Garden Reach Shipbuilders & Engineers Ltd led the gains, up 2.01% to ₹1,951.55.

Brokerages’ Views: ICICI says that the developments imply that the government is concentrating on enhancing the capabilities of the Air Force, the Army and the Coast Guard. It expects companies that make aero-engine parts, to benefit from increased domestic sourcing requirements, as long as they get the needed approvals.

Additionally, the domestic ecosystem might receive a boost, as the majority of acceptance of necessity (AoNs) fall under the “Buy Indian” and “Buy Indian-Indigenously Designed Developed and Manufactured” categories, which reinforce the government’s focus on self-reliance in defence.

Bharat Electronics (BEL) stands to gain from its participation in nearly every platform, the brokerage said, selecting the firm as its top pick among defence PSUs. It had an “add” rating for the stock with a target price of ₹350.

Among the non-government entities, its top picks were Solar Industries and Azad Engineering. It had a “buy” call on both firms with target prices of ₹13,250 and ₹2,450 respectively.

Antique Stock Broking also expressed optimism for the industry, which it said is set for strong growth opportunities in the near to long term.

“The total share of domestic procurement has seen a phenomenal improvement from 54% in FY19 to 75% in FY24 and is expected to improve further,” Antique said.

It said that the recent procurement and orders are a great opportunity for defence firms and maintained a “buy” recommendation for most stocks within its coverage, including HAL with a target price of ₹6,145, BEL with a target price of ₹381, Bharat Dynamics with a target price of ₹1,579, Mazagon Dock Shipbuilders with a target price of ₹5,486 and Garden Reach Shipbuilders (GRSE) with a target price of ₹2,092.

The Indian National Congress (INC), the country’s largest opposition party, made new accusations against Prime Minister Narendra Modi and SEBI head Madhabi Buch on Monday, September 2.

The party demanded an explanation from PM Modi on Buch’s appointment to lead the market regulator. 

Congress leader Pawan Khera levied a slew of charges against Madhabi Puri Buch, the chairman of the Securities and Exchange Board of India (SEBI), and her relationship to ICICI Bank. According to Khera, Buch has been paid by both the government and two private institutions, ICICI Bank and ICICI Prudential. During a press conference, he revealed that Buch earned a steady income of Rs 16.80 crore from ICICI Bank between 2017 and 2024, which is five times her pay of Rs 3.30 crore from SEBI. He further said that Buch was paid during this period even though numerous investigations against ICICI Bank were resolved.

Allegations Raised Against The SEBI Chairperson

He claimed that in violation of Section 5 of SEBI’s Code on Conflict of Interests for Board Members (2008), which forbids full-time SEBI employees from accepting benefits from any other organisations and from engaging in activities that involve receiving a salary or fee, Buch received a salary of Rs 12.63 crores from ICICI Bank between 2017 and 2021 while serving as a full-time member of SEBI.

Additionally, Buch received an ESOP of Rs 2.84 crore from ICICI Bank between 2021 and 2023. According to Khera, the SEBI chairperson received TDS on the ESOP during that same time period, which was paid by ICICI Bank in the amount of Rs 1.10 crores.The Congress spokeswoman questioned Buch, saying, “You are also a full-time SEBI member. Why were you taking a salary from ICICI?”

Questions Raised Against PM Modi

“Was the Prime Minister aware that the SEBI chairperson was holding an office of profit and receiving salary/income from ICICI during her time at SEBI?” Khera posed a query to Prime Minister Modi. He went on to question why and by whom the SEBI chairperson is being protected.

The head of the Congress emphasised that Union Minister Amit Shah and Prime Minister Modi’s Appointments Committee of the Cabinet make the appointment of SEBI’s chairwoman.

“The people have put their trust in SEBI, whose chairman is directly appointed by the Indian Prime Minister (Annexure 1), but it seems like they have been lying to us the entire time,” he remarked.

ICICI’s statement

“ICICI Bank or its group companies have not paid any salary or granted any ESOPs to Ms Madhabi Puri Buch after her retirement, other than her retiral benefits,” claimed the bank.

“Ms. Buch received all of the payments after she retired, which had been accrued throughout her time working for the ICICI Group. Retirement benefits and ESOPs are included in these payments,” the statement continued.

After the company announced on Friday that it had inked a memorandum of understanding (MoU) with Patel Engineering, shares of Rail Vikas Nigam surged by more than 3%.
According to RVNL, the primary goals of the MoU are to collaborate and provide a supportive environment in order to realise synergies in the domains of hydropower and other infrastructure projects.

The business recently defeated Southern Railway to get the lowest bid (L1) on a project worth more than ₹111.38 crore. The directive must be carried out, according to RVNL, within 18 months.

RVNL said earlier this month that it and Dhaya Maju Infrastructure (Asia) Sdn Berhad (DMIA) had inked an agreement. The main goal of the Memorandum of Understanding, according to the business in an exchange filing, is to specify the terms and circumstances under which RVNL and DMIA may cooperate to jointly participate in railway infrastructure and services projects in the ASEAN market and other regions.

According to the company, building a manufacturing base in Malaysia for railway carriages and other railway items will receive particular attention in order to meet the expanding demand of ASEAN nations.
In July, RVNL also received a number of orders. The company said that, under the revised reforms-based and results-linked distribution sector scheme, it had emerged as the lowest bidder (L1) for the building of distribution infrastructure in the central zone of Himachal Pradesh.

Additionally, the company was given a letter of acceptance by South Eastern Railway for the design, supply, installation, testing, and commissioning of 132 kV traction substations, sectioning posts, and sub-sectioning posts on the Chakradharpur division of South Eastern Railway’s Rajkhaswan-Nayagarh-Bolani section.

Meanwhile, operations’ revenue fell 27% YoY to ₹4,073.80 crore in the first quarter of the fiscal year 2025. The total revenue was ₹4,336.75 crore, a 26% YoY decline. YoY, net profit dropped by 35% to ₹224 crore.

Since the start of the year, shares of RVNL have increased by more than 228%. In the past year, the stock has increased by almost 365%.

Adani Enterprises, which already manages seven significant airports in India, including those in Mumbai and Navi Mumbai, is growing its presence in the aviation industry. This demerger coincides with this growth. The corporation intends to increase service offerings and infrastructure in addition to making large investments in airport operations.The move to split off the airport company is consistent with Adani Group’s standard practice of nurturing ventures under Adani Enterprises until they are ready to be spun out into separate companies. The group’s growth strategy has always been characterised by this approach, which enables targeted management and investments in niche markets.

The proposed demerger is anticipated to set Adani’s airport operations up for future success as the country’s aviation sector is predicted to grow significantly. This would allow for more focused investments and operational approaches that are specifically designed to meet the demands of the aviation market.