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Mint
31 minutes ago
- Mint
Expert view: Nifty EPS may grow at a 13% CAGR over FY25–FY27, says Anil Rego of Right Horizons PMS
Expert view: Anil Rego, the founder and fund manager at Right Horizons PMS, believes the Nifty 50 EPS may grow at a CAGR of nearly 13 per cent over FY25–FY27, making the case for moderate, earnings-driven gains over the medium term. In an interview with Mint, Rego shared his expectations for Q1 earnings and said he is positive about banking, defence, and consumer discretionary sectors, among others, at this juncture. Edited excerpts: Following a sluggish start, Indian markets witnessed a notable recovery in June, spurred by a combination of supportive global developments and decisive domestic policy actions. The Reserve Bank of India's 50 bps rate cut and a 100 bps reduction in the CRR, alongside a 9 per cent monsoon surplus and easing oil prices, have improved liquidity and sentiment. This led to a sharp uptick in rate-sensitive sectors like financials, real estate, and autos, with broader markets outperforming large caps. Globally, while risk sentiment has improved post-ceasefire in the Middle East, geopolitical fragility, policy uncertainty in the US, and tariff tensions remain key overhangs. Despite these risks, corporate earnings remain resilient, and consensus expects Nifty EPS to grow at a CAGR of nearly 13 per cent over FY25–FY27. This supports the case for moderate, earnings-driven gains over the medium term. The US tariff risk is a growing concern for Indian markets, especially after India announced retaliatory tariffs on US steel and aluminium at the WTO. While the risk remains sector-specific for now, impacting exports like IT, pharma, and metals, it does not yet pose a threat of prolonged economic pain due to India's strong domestic fundamentals. However, if trade tensions escalate further, it could hurt earnings in export-oriented sectors and trigger FPI outflows. The Q1FY26 earnings season is expected to show early signs of recovery, but it may not mark a broad-based turnaround just yet. While some sectors are poised to outperform, others are likely to face lingering challenges, suggesting that the worst may be behind us selectively, not uniformly. Banking sector: Banks are expected to report muted earnings growth due to margin compression from the RBI's recent repo rate cuts, seasonally weak fee income, and elevated credit costs, particularly in unsecured and agri loan segments. However, the outlook improves from the second half of the financial year (H2FY26), with expectations of improved loan growth, easing deposit costs, and declining slippages. IT sector: The IT sector is likely to report mixed revenue growth. Tier-1 IT companies may post flat to marginally negative constant-currency (CC) growth, with only a few companies expected to grow sequentially. Mid-tier firms are expected to do relatively better, driven by strength in BFSI, healthcare, and GenAI-led demand. The sector's deal pipeline remains healthy, and margin guidance is stable, indicating resilience despite macro headwinds. The market outlook supports a selective sectoral approach, focusing on areas with strong earnings visibility, structural tailwinds, and valuation comfort. Financials (banks & NBFCs) Banks remain structurally positive, with asset quality stabilising and credit demand holding up. Margins may have peaked, but lower funding costs from RBI rate cuts should aid profitability from H2FY26. NBFCs, especially in retail lending, gold loans, and vehicle finance, are expected to benefit from improved liquidity and demand recovery. Funding diversification and strong disbursement momentum support their outlook. Public and private capex revival, strong order books, and government focus on infrastructure make this sector attractive. Execution momentum is visible across electrification, construction equipment, and engineering segments, backed by rising investments and policy incentives. A structural growth story driven by indigenous procurement (92 per cent of contracts awarded to Indian firms), record exports, and rising capex allocation. Private players are gaining traction alongside DPSUs, supported by a ₹ 40,000 crore emergency procurement push. Hospitals are showing robust growth in profitability, ARPOB, and occupancy rates. Expansion into tier-2 cities and the medical tourism potential offer multi-year tailwinds. Diagnostics and digital health initiatives continue to support earnings resilience. Urban consumption remains healthy, aided by premiumisation and easing input costs. Value fashion, QSRs, electronics, and jewellery segments are doing well. Tax relief and rural revival could further aid demand in H2FY26. EMS firms are benefitting from PLI schemes, China+1 diversification, and rising demand for domestic electronics. Strong capex, growing order books, and operating leverage suggest continued double-digit growth. The Indian wealth management sector is at a pivotal inflection point, driven by the rapid rise of HNIs and ultra-HNIs. Financial assets held by these segments are projected to grow from $1.2 trillion in 2023 to $2.2 trillion by 2028, reflecting strong wealth creation and rising financialization of assets. Yet, only 15 per cent of India's financial wealth is professionally managed, compared to nearly 75 per cent in developed markets. This vast gap presents a structural opportunity for PMS, AIFs, and advisory platforms to expand. There appears to be selective value emerging in the IT sector, particularly among mid-tier companies, although the broader outlook remains cautious. Early Q1FY26 earnings trends suggest that: Tier-1 IT firms are expected to post muted revenue growth in constant currency terms, with flat to low-single-digit QoQ changes. Deal flow remains intact, but revenue conversion is lagging due to delayed decision-making by clients in the US and Europe. Mid-cap IT players, however, are showing signs of resilience. They are benefitting from niche capabilities in areas like healthcare, engineering services, and AI-linked digital services. Early previews indicate better execution and margin improvement from this segment. From a valuation standpoint, the sector has derated and is trading closer to its long-term average. While high-growth tailwinds of the pandemic years have faded, the sector offers reasonable entry points for long-term investors willing to ride out near-term demand uncertainty. Cost efficiency, GenAI adoption, and vendor consolidation deals could drive outperformance for well-positioned firms. As of June 2025, key indices like the Sensex are trading at nearly 24.7 times trailing PE and nearly 3.7 times P/B, which are above their 10-year averages. This elevated valuation comes after a sharp June rally driven by the RBI's front-loaded rate cuts, falling crude prices, and foreign inflows. In this context, a prudent equity investment strategy would involve: Bottom-up stock selection: Focus on fundamentally strong companies with stable earnings visibility, robust cash flows, and sectoral tailwinds, particularly in financials, manufacturing, healthcare, and select midcap IT. Maintain valuation discipline: Avoid chasing momentum in overvalued stocks or sectors. Seek opportunities where growth is not fully priced in, especially in sectors benefiting from reforms, PLI, or rising domestic demand. Diversify across market caps: While large caps offer safety in uncertain times, select mid and small caps with solid fundamentals and reasonable valuations can provide alpha as the cycle broadens. Use volatility to build exposure: Geopolitical risks, global rate uncertainty, and election-driven policies may trigger short-term corrections. These should be used to accumulate quality names rather than exiting in panic. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
Mint
an hour ago
- Mint
JSW Infra to Lodha - Vinay Rajani of HDFC Sec suggests these stocks to buy in the near-term
Stock market today: Indian stock markets was trading in red on Monday due to concerns over valuations combined with disappointing earnings for the first quarter of the current financial year. At 13:44 IST, Nifty 50 index was trading at 25,045 . 85, decreasing by 103.05 points or 0.41%, while the Sensex was at 82,130.57, falling by 356.54 points or 0.43%. Analysts attribute the cautious opening to a combination of elevated valuations, underwhelming corporate performance, and global uncertainties. On the technical front, according to Vinay Rajani from HDFC Securities, Nifty 50's next crucial support is now seen near 25,000, 50-day Exponential Moving Average. Rajani has recommended two stock to buy for short-term. Here's what he expects from Indian stock market next week, along with his stock recommendations. Market Views - Vinay Rajani, Senior Technical and Derivative Analyst, HDFC Securities Nifty 50 Last week, the Nifty 50 lost 1.22% and closed below its 20 days SMA placed at 25,265. Nifty 50 has violated the support of its upward-sloping trendline, which connects previous swing highs of 25,116 and 25,222. The next crucial support is now seen near 25,000, 50-day Exponential Moving Average which also coincides with the lower trendline of a rising wedge pattern on the daily chart. A decisive close below 25000 could trigger momentum selling, potentially dragging the Nifty 50 towards a positional support of 24,500. The recent swing high of 25,549 is not expected to act as strong resistance, and caution is advised unless this level is decisively breached. Bearish signals from indicators and oscillators like MACD and RSI on the daily chart further suggest potential weakness. Also Read | Stocks to buy for short term: Jigar Patel of Anand Rathi is bullish on 3 shares Bank Nifty Similarly, Bank Nifty is also trading within a rising wedge pattern on its daily chart, with the lower trendline of the wedge placed at 56,600 in the spot market. A close below this level would signal a fresh breakdown, potentially pushing the index towards supports at 55,900 and 55,150. Broader market indices also show signs of weakness; the NSE500 index has violated multiple trendlines and its 20-day DMA on a closing basis. Both Nifty Midcap100 and Smallcap100 indices have confirmed a 'Doji'; reversal pattern after a prolonged uptrend on their weekly charts, with a subsequent bear candle reinforcing this bearish reversal. On the global front, after a bullish breakout on positional charts, the MSCI Emerging Market index has formed a 'Doji' candlestick, which could lead to a 'throwback'; fall towards its previous breakout point. Conversely, the Dollar Index, after a prolonged downtrend, has formed a 'Doji'; candle followed by a bullish candle on its weekly chart, signaling a potential bullish reversal. Given the negative correlation between the Dollar and Emerging Market equities, this suggests a possible downward movement in emerging markets and an upward trajectory for the Dollar Index from current levels. Nifty 50 Strategy : Short term Trend of Nifty 50 has turned weak. Recent swing high of 25,550 should be surpassed to negate the further downside. Momentum selling may emerge below the crucial support of 25,000 in Nifty 50, which could drag the index further towards positional support of 24,500. Traders should cut longs and go short below 25,000 in Nifty 50 for the downside target of 24,500, keeping stoploss at 25,350. Also Read | Dharmesh Shah recommends THIS stock to buy today- 14 July 2025 Technical Picks: Stocks to buy in the near-term Vinay Rajani of HDFC Securities recommends these two stocks in the near term - JSW Infrastructure Ltd, and Lodha Developers Ltd. Buy JSW Infrastructure ( ₹ 319) | Target ₹ 350 | Stop-loss ₹ 304 JSW Infra share price has broken out from symmetrical triangle pattern on the weekly chart. Price rise was accompanied by jump in volumes. Stock price has been sustaining above 50 DEMA and 200 DEMA. Weekly RSI has reached above 50, indicating a sustainable up trend. Weekly MACD is now placed above signal and equilibrium line. Buy Lodha ( ₹ 1,396): | Target ₹ 1,621 | Stop-loss ₹ 1,300 Lodha share price has broken out from the descending triangle pattern on the weekly chart. Stock is placed above key moving averages, indicating bullish trend on all time frames. Realty sector index has been outperforming for last couple of weeks. Monthly RSI has given bullish crossover, which indicates strength in the stocks. Volumes have risen along with the recent price rise. Stock has been forming higher tops and higher bottoms on the daily and weekly chart. Also Read | Stocks to buy under ₹100: Experts recommend six shares to buy today Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Business Standard
an hour ago
- Business Standard
Hindustan Zinc stock gains 3% as Silver hits all time high; check details
Hindustan Zinc share price today: Shares of Hindustan Zinc, a subsidiary of Vedanta, rose nearly 3 per cent on Monday, July 14, to hit an intraday high of ₹436.95 as silver prices touched record highs. At 2:15 PM, the stock was quoting at ₹435.6, up 2.5 per cent compared to the previous day's close of ₹424.9. In comparison, the benchmark Nifty50 index was trading at 25,044.6 levels, down 105 points or 0.45 per cent. The company's total market cap stands at ₹1.82 trillion. The stock has surged over 12 per cent from its 52-week low of ₹378.15 touched on March 3, 2025. On the Multi Commodity Exchange (MCX), Silver's future contracts with September expiry touched an all-time high of ₹1,14,875 per kilogram today. While the future contracts with December expiry touched a record high of ₹1,16,566 per Kg. According to data on Goods Returns, silver was trading around 1.15 lakh per kg in the Indian markets. The sharp surge in silver prices came as investors fled to safe havens amid global uncertainties. On July 12, US President Donald Trump threatened to impose a 30 per cent tariff on imports from Mexico and the European Union starting on August 1. Earlier, he imposed a 35 per cent tariff on Canada, while warning of further hikes if they retaliate. CATCH STOCK MARKET LIVE UPDATES TODAY Gold prices also witnessed a sharp surge. The yellow metal's August futures on the MCX touched a high of ₹98,438 per 10 grams. Domestic rates of gold increased, with the price of 10 grams of 24k gold standing at around ₹99,880. Yes Securities on Hindustan Zinc According to a recent report by Yes Securities, Hindustan Zinc's silver segment has emerged as a key earnings pillar and is expected to play an increasingly important role in driving profitability. With global silver supply under pressure and industrial demand, particularly from photovoltaic (PV) cell manufacturing, on the rise, prices are likely to remain firm over the medium term. The company targets silver production of 800 tonnes per annum (tpa), with output projected to reach 752 tonnes by FY27E, implying a 4.6 per cent CAGR over FY25–27E. Revenues from silver are expected to grow at a 9 per cent CAGR, while earnings before interest and tax (Ebit) contribution rises at a 7.4 per cent CAGR over the same period. Given the company's superior margins and structural demand tailwinds, the silver business is well-positioned to sustain profitability growth and become a core contributor to its earnings expansion. Analysts at Yes Securities maintain a positive stance on Hindustan Zinc, citing the strong earnings outlook from its high-margin silver segment. About Hindustan Zinc Hindustan Zinc is the world's largest and India's only integrated zinc producer. It is a subsidiary of Vedanta, which owns a 63.42 per cent stake, and the Government of India retains a 27.92 per cent stake. It currently holds around 77 per cent market share in India's primary zinc market. It is among the top five silver producers in the world with an annual capacity of 800 million tonnes. Hindustan Zinc's operations comprise lead-zinc mines, hydrometallurgical zinc smelters, lead smelter, pyro metallurgical lead-zinc smelter, as well as sulphuric acid and captive power plants in northwest India. Its total metal production capacity stands at 1.123 metric tonnes. The company has facilities located in five districts of Rajasthan, which include Udaipur, Chittorgarh, Bhilwara, Rajsamand and Ajmer, along with one district of Uttarakhand.
