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Nifty is due for a pause, may even ease in early part of 2022: Report

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3 years ago

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Even after the GDP bounce-back off the low Covid-19 base, India can manage a 7.7 per cent expansion in FY23 and hence deliver growth that is almost unrivalled globally, UBS said in a report.

Yet, after a stellar two years for the Nifty where it even left the S&P behind at times (even in US Dollar terms), we believe the valuation does not fully reflect upcoming headwinds, the report said.

These include rising interest rates both globally and in India, and importantly, the return of India’s historic soft spot, current account deficits. “These headwinds may affect not only the country’s stock market but also the INR. We hence believe a multi-month pause is in order, the recent correction notwithstanding,” the report said.

“All told, within the space of two years, the current account is likely to swing from its surplus of 0.9 per cent of GDP towards a 1.9 per cent deficit, in our view. We believe this will bring down the INR. We look for USDINR to trade towards 79 levels by end-2022,” UBS said.

Another interesting and potentially bearish aspect is the lopsidedness of recent inflows that have kept the market afloat. They are now derived almost exclusively from domestic retail investors. However, the past has shown that this type of flows can stop when markets no longer exhibit a steady rise, and potentially higher bank deposit rates could become a potent competitor again when the RBI starts to hike interest rates, UBS said.

India’s stock market left most emerging markets and even developed markets counterparts in the dust during 2020 and especially 2021. That said, and the structural appeal of the Indian market notwithstanding, we believe in the near term the Nifty is due for a pause, and may even ease in the early part of 2022, UBS said.

“A key reason is indeed the still lofty valuation premium. We expect this process to continue. The earnings growth of 28.3 per cent for FY22 and 11.7 per cent for FY23 works as a partial counter-force and will likely help to prevent a strong correction. At the same time, we stress that as is often the case, consensus estimates look implausibly high to us”, UBS said.

Still, financials should come to the fore on the back of rising loan growth, coupled with expanding interest margins. We also like cyclical names in the vehicle, cement and construction space. We believe materials stocks on multi-year high valuations will likely underperform as some supply tightness eases, the report said.

In our estimate, the central bank will likely start to slightly tighten policy measures from March and subsequently raise its repo rate around September, followed by a second rate hike later during the year to arrive at 4.5 per cent, the report said.

During the early part of the pandemic, exports held up reasonably well while imports plummeted. Yet, for FY23, we expect only small export growth while imports should come roaring back as the economy reopens further and oil prices are rising.

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ACME Solar’s net profit for FY25 crashes over 64 pc to Rs 250.8 crore

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11 hours ago

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May 20, 2025

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Mumbai, May 20: Gurugram-based renewable energy player ACME Solar Holdings Limited has reported a steep decline of over 77 per cent year-on-year (YoY) in its consolidated net profit, which dropped to Rs 122 crore in the March 2025 quarter (Q4 FY25).

The company had posted a net profit of Rs 532.3 crore in the same period last financial year (Q4 FY24), according to its stock exchange filing.

For the full financial year (FY25), ACME Solar’s net profit declined by around 64 per cent to Rs 250.8 crore, compared to Rs 697.7 crore in FY24.

The sharp fall in profits came despite a strong rise in revenue. The company’s revenue from operations in Q4 stood at Rs 486.88 crore, up from Rs 295.16 crore a year ago — marking a YoY growth of nearly 65 per cent.

Total income also increased significantly to Rs 539.2 crore in Q4 FY25, from Rs 318 crore in the corresponding quarter last fiscal — showing a 69.56 per cent rise.

However, finance costs grew to Rs 205.5 crore from Rs 177.3 crore in the same period last fiscal — an increase of around 15.90 per cent.

Depreciation and amortisation expenses also rose sharply to Rs 102.2 crore, up 66.99 per cent from Rs 61.2 crore in Q4 FY24.

Despite the decline in profits, the company highlighted strong operational progress.

Chairperson and Managing Director Manoj Kumar Upadhyay said FY25 was a ‘remarkable year’ for ACME Solar, as it expanded its operational portfolio and commissioned its largest single-location project — a 1,200 MW SECI ISTS solar project.

He added that the company is now witnessing stronger earnings performance, with Q4 revenue rising 70 per cent YoY to Rs 539 crore and EBITDA jumping 118 per cent to Rs 488 crore.

He also stated that ACME’s focus on hybrid and firm-dispatchable renewable energy (FDRE) solutions is making the business more resilient.

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Jupiter Wagons’ net profit falls nearly 2 pc in Q4, revenue slips

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1 day ago

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May 19, 2025

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Mumbai, May 19: Railway wagons and components manufacturer Jupiter Wagons on Monday reported a decline of 1.9 per cent in its net profit at Rs 103 crore in Q4 FY25, down from Rs 105 crore in the same period last fiscal.

The profit before tax (PBT) also declined by 8.26 per cent year-on-year (YoY) to Rs 127.47 crore from Rs 138.95 crore, according to its stock exchange filing.

The company’s consolidated total income also saw a decline, falling to Rs 1,057 crore from Rs 1,127 crore a year earlier — a drop of around 6.2 per cent.

Similarly, revenue from operations decreased by approximately 6.4 per cent, from Rs 1,115.41 crore in the year-ago period to Rs 1,044.54 crore in the last quarter of FY25.

Despite the revenue dip, Jupiter Wagons managed to reduce its total expenses to Rs 923.34 crore in Q4, down 6.4 per cent compared to Rs 986.41 crore in the same quarter last financial year.

However, on a sequential basis, expenses rose by about 1.56 per cent compared to Rs 909.16 crore in Q3.

The company’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) rose slightly to Rs 153 crore from Rs 147 crore last fiscal, with the EBITDA margin improving to 14.6 per cent from 13.2 per cent.

Shares of Jupiter Wagons Limited fell by Rs 13.1 or 3.1 per cent to close the intra-day trading session at Rs 408.95 on the National Stock Exchange (NSE) on Monday.

Speaking about the full financial year, Managing Director Vivek Lohia described FY25 as a transformative year for Jupiter Wagons.

He highlighted several strategic wins, including major contracts with Braithwaite for wheelsets.

“The company also secured brake system contracts worth over Rs 215 crore,” Lohia mentioned.

Lohia emphasised the company’s push into electric mobility with the inauguration of a new facility in Pithampur.

“This state-of-the-art plant is expected to drive battery production and supply to Indian Railways and private partners, along with orders for complete Battery Energy Storage Systems (BESS),” he said.

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Govt unlikely to renew IndiGo pact with Turkish Airlines

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2 days ago

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May 19, 2025

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New Delhi, May 19: The government is unlikely to extend the commercial airline IndiGo’s leasing agreement with Turkish Airlines due to strained diplomatic relations following Turkey’s open support for Pakistan after the Pahalgam terror attack and Operation Sindoor launched by India to avenge the killings of 26 tourists.

“The current pact, which enables IndiGo to operate wide-body aircraft on the Delhi-Istanbul route, expires on May 31. The government review is underway and the deal is unlikely to be renewed given the broader diplomatic context,” according to an Media report, citing people in the know.

IndiGo currently operates over 500-seater Airbus A330s on lease from Turkish Airlines for its Istanbul flights. The partnership also includes a codeshare deal that allows IndiGo to sell connections to over 40 destinations in Europe and North America via Istanbul.

On Thursday, IndiGo defended the collaboration, calling it “strategic” and essential for offering Indian flyers long-haul international access.

Apart from the vocal support during the heinous Pahalgam massacre, Turkey has also supplied drones to Pakistan, which were used to attack India during Operation Sindoor.

The issue of renewal of the IndiGo agreement with Turkish Airlines comes up at a time when India is already snapping ties with Turkish businesses and universities.

The government on Thursday revoked the security clearance for Turkish ground-handling firm Celebi Airport Services at Indian airports, due to national security concerns.

The Turkish company handled around 70 per cent of the ground operations at Mumbai airport, including passenger services, load control, flight operations, cargo and postal services, warehouses and bridge operations.

Adani Airport Holdings has also scrapped its agreement with Turkish company DragonPass to provide the latter’s customers access to its airport lounges.

“Our association with DragonPass, which provided access to airport lounges, has been terminated with immediate effect. DragonPass customers will no longer have access to lounges at Adani-managed airports. This change will have no impact on the airport lounge and travel experience for other customers,” the Adani Airport Holdings spokesperson said on Thursday.

Hundreds of Indian tourists have cancelled their trips to Turkey and Azerbaijan as part of the nationalistic backlash against these countries for supporting Pakistan in the conflict with India. Leading online travel booking platforms MakeMyTrip and EaseMyTrip have reported mass cancellations and a sharp drop in Indian tourists wanting to travel to Turkey and Azerbaijan.

Similarly, many Indian universities, including Jawaharlal Nehru University, Jamia Millia Islamia, and Maulana Azad National Urdu University, have suspended academic ties with Turkish institutions.

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