Latest news with #Ambit
Mint
16-07-2025
- Business
- Mint
Indias Volatility Index Dips on Easing Tariff Concerns, Rate Cut Hopes
(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at: Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai. Local traders are set to start the day on the backfoot following the selloff on Wall Street and a choppy trend in regional markets. Till India's trade deal with the US is sealed, big moves could likely be limited to companies announcing quarterly numbers. Tech Mahindra's results later in the day will be closely watched after underwhelming numbers from TCS and HCL Technologies have further soured the outlook for the IT sector. Volatility cools on tariff relief, rate cut hopes India's 30-day ahead volatility — often called the fear index — has declined to its lowest level since April 2024, reflecting growing investor belief that President Donald Trump's tariff threats are largely rhetorical and aimed at negotiating. Meanwhile, local sentiment is getting a lift after the RBI Governor signaled Tuesday that the central bank will continue to cut interest rates if inflation eases or growth slows. Expanding valuations, shrinking returns Valuations in the BSE 500 index have stretched since June 20, according to analysts at Ambit. They point out that around 43% of the index's stocks trade at more than five times their price-to-sales ratio, compared with about 31% seen during the peak of the 2007 bull market. As a result, median returns have started to shrink. Ambit also warns that inflows into mutual funds may come under pressure, especially as returns from some of the largest small- and mid-cap funds begin to moderate. Ola's long journey to recovery After losing over $5 billion in market value from its peak, Ola Electric's latest quarterly results brought some relief. But the e-scooter maker needs to deliver on the bullish tone struck during its recent earnings call. HSBC analysts see a pragmatic approach in the company's outlook and execution strategy, but warn that most of the potential gains are already priced in. Analyst opinions are split: three recommend buying, three suggest selling, and two advise holding. The consensus points to a modest 6% return over the next year. Three great reads from Bloomberg today: HCL Technologies may have delivered a weaker-than-expected first-quarter performance, but there's still reason for optimism. According to Jefferies, the company's newfound status as the top revenue earner in the IT sector could help it maintain a valuation premium over larger rivals such as Infosys and Tata Consultancy Services. What's more, HCL has raised its growth outlook for fiscal 2026 to 3%-5% — the highest among India's top five IT services firms, Jefferies adds. To read India Markets Buzz every day, follow Bloomberg India on WhatsApp. Sign up here. --With assistance from Ashutosh Joshi, Alex Gabriel Simon and Kartik Goyal. More stories like this are available on
NDTV
11-07-2025
- Business
- NDTV
Big Boost For Central Govt Employees: 8th Pay Commission Could Deliver 30-34% Salary Hike, Says Ambit Capital
Central government employees and pensioners could be in for a significant salary and pension boost soon. According to Ambit Capital, the upcoming 8th Pay Commission is expected to propose a massive 30-34% increase in effective take-home pay - more than double the 14.3% hike implemented under the 7th Pay Commission. The 8th Pay Commission, though not yet officially constituted, is likely to be rolled out in the financial year 2026-27 (FY27). Once implemented, this revision is estimated to cost the government approximately Rs 1.8 lakh crore annually - significantly more than the Rs 1.02 lakh crore incurred during the 7th Pay Commission rollout in FY17. What's Behind the Big Hike? The key driver behind this anticipated jump is the fitment factor, a multiplier used to calculate revised salaries. While the 7th Pay Commission had a fitment factor of 2.57, Ambit Capital's projections suggest a higher number this time around. One crucial detail: When a new Pay Commission takes effect, the Dearness Allowance (DA) - which currently stands at 55% of the basic salary - is reset to zero. This means the starting point for salary calculation is recalibrated, even if the nominal basic pay rises significantly. For context, under the 6th Pay Commission, a basic pay of Rs 7,000 translated to a take-home salary of Rs15,750. The 7th Pay Commission raised the basic pay to Rs 18,000, but the effective hike was just 14.3% due to the DA reset. Including allowances, the total increase was about 23%. This time, Ambit expects the effective hike to be much more substantial, signalling a possible total compensation jump exceeding 30%. What's Next? Although the government has yet to form the 8th Pay Commission panel, the process typically spans 18-24 months from constitution to report submission. If formed soon, the implementation could align with FY27, in keeping with the 10-year cycle observed for previous commissions. In the meantime, central government employees continue to receive biannual DA hikes to offset inflation.
Economic Times
08-07-2025
- Business
- Economic Times
FMCG could see earnings upgrade, but valuation still a concern: Nitin Bhasin
"If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight," says Nitin Bhasin, Ambit. ADVERTISEMENT But within the FMCG basket any stock that you can talk to us about given that we already have your top buys and top sells. So, anything that is looking interesting to you and with respect to the valuations as well, are they comforting at this point in time because they have not done anything for the past couple of years if we see? Nitin Bhasin: You are right FMCG as a sector valuations have remained rich, but remember in our country lot of valuations are a function of flows also, I will keep on going back to that, and the mutual funds, the institutional investors, they continue to own these names because these are considered to be quality companies. A few names that we like maybe more like the Indian domestic companies like GCPL we would like them but not going into a specific stock discussion please. I was also looking at some of your other top sells. Highlight for us, where is it that you do not see any valuation comfort now and you think valuations are at their peak and it makes sense to actually book profits if not completely exit? Nitin Bhasin: I would say when you look at the sectors again within the IT where we like it as a space, there could be some of the midcap IT companies which are perhaps very priced for the quality of the business, there is something like a Coforge could be one, something like Persistent could be another one where we think that these are really-really priced. At the same point in time there could be stocks like DMart in the consumption space where we find them very-very priced, would remain away from such names. And at the same point in time, I would say even consumer durable companies like Voltas which appear to be very priced and perhaps stuck in a very-very highly competitive zone where they are unable to create value from the one business of consumer durables that they are in or in the projects business. Those are three or four names that stand out. But at the same point in time in the banks also we have highlighted before names such as Kotak, etc, are the ones. What we do not like is themes like I would say defence today which is like a talk of the town. There could be stocks such as Godrej Real Estate priced, again I would say so, though the real estate sector holds up really well. So, those are the five or six names which come to my mind as one of the key sell ideas that we would have from our basket today. ADVERTISEMENT I want to go back to FMCG again and this is my personal view which is that if you buy stocks which have 4.5% growth and sectors which are growing below the GDP and if PE multiples are 50, 60, how will you make money? Nitin Bhasin: Very interesting. If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight. ADVERTISEMENT But again, let us go back on the similar principles that if you look at many of these defence companies also in India which are fairly very large, large expensive companies, they are trading at more than 50, 60, even EMS companies like Dixon which we have a sell on one would actually say that they can grow much faster but their valuations are perhaps in excess of 50 times, 60 times again. Perhaps it is the mood change is what the market is looking for. In the case of FMCG, the mood change for earnings growth trajectory, remember one is the valuations but the other is what is the earnings expectations and the market sometimes follows, but most of the time in the short term follows the earnings expectations trajectory and perhaps FMCG looks like one where the downgrades are behind us, I mean there is a possibility of some minor upgrades in the near term, let us see whether it builds up into a bigger trend. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
08-07-2025
- Business
- Time of India
FMCG could see earnings upgrade, but valuation still a concern: Nitin Bhasin
"If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight," says Nitin Bhasin , Ambit . But within the FMCG basket any stock that you can talk to us about given that we already have your top buys and top sells. So, anything that is looking interesting to you and with respect to the valuations as well, are they comforting at this point in time because they have not done anything for the past couple of years if we see? Nitin Bhasin: You are right FMCG as a sector valuations have remained rich, but remember in our country lot of valuations are a function of flows also, I will keep on going back to that, and the mutual funds, the institutional investors, they continue to own these names because these are considered to be quality companies. A few names that we like maybe more like the Indian domestic companies like GCPL we would like them but not going into a specific stock discussion please. I was also looking at some of your other top sells. Highlight for us, where is it that you do not see any valuation comfort now and you think valuations are at their peak and it makes sense to actually book profits if not completely exit? Nitin Bhasin: I would say when you look at the sectors again within the IT where we like it as a space, there could be some of the midcap IT companies which are perhaps very priced for the quality of the business, there is something like a Coforge could be one, something like Persistent could be another one where we think that these are really-really priced. At the same point in time there could be stocks like DMart in the consumption space where we find them very-very priced, would remain away from such names. And at the same point in time, I would say even consumer durable companies like Voltas which appear to be very priced and perhaps stuck in a very-very highly competitive zone where they are unable to create value from the one business of consumer durables that they are in or in the projects business. Live Events Those are three or four names that stand out. But at the same point in time in the banks also we have highlighted before names such as Kotak, etc, are the ones. What we do not like is themes like I would say defence today which is like a talk of the town. There could be stocks such as Godrej Real Estate priced, again I would say so, though the real estate sector holds up really well. So, those are the five or six names which come to my mind as one of the key sell ideas that we would have from our basket today. I want to go back to FMCG again and this is my personal view which is that if you buy stocks which have 4.5% growth and sectors which are growing below the GDP and if PE multiples are 50, 60, how will you make money? Nitin Bhasin: Very interesting. If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight. But again, let us go back on the similar principles that if you look at many of these defence companies also in India which are fairly very large, large expensive companies, they are trading at more than 50, 60, even EMS companies like Dixon which we have a sell on one would actually say that they can grow much faster but their valuations are perhaps in excess of 50 times, 60 times again. Perhaps it is the mood change is what the market is looking for. In the case of FMCG, the mood change for earnings growth trajectory, remember one is the valuations but the other is what is the earnings expectations and the market sometimes follows, but most of the time in the short term follows the earnings expectations trajectory and perhaps FMCG looks like one where the downgrades are behind us, I mean there is a possibility of some minor upgrades in the near term, let us see whether it builds up into a bigger trend.
Mint
02-07-2025
- Business
- Mint
Expert view: Nifty to give muted return in FY26; equities may not outperform bonds significantly, says Bhasin of Ambit
Expert view on markets: Nitin Bhasin, the head of institutional equities at Ambit, believes the domestic market may give muted returns this year and equities may not significantly outperform bonds. In an interview with Mint, Bhasin shared his views on markets and sectors he is positive about. Here are edited excerpts of the interview: We are in the phase of rise in stock market concentration, wherein market returns are muted and large-caps outperform mid-caps and small-caps. This has been the case in CY25TD, wherein large-caps have outperformed mid-caps and small-caps, and we expect this to worsen going forward. It is time to be selective as FY26 is expected to be a stock-picker's market. Our GRIP framework (growth, risk premium, inflation and positioning) suggests a weak outlook for equities and asset allocation in favour of bonds. With earnings growth slowing down (FY26E estimate is one of the lowest starting earnings growth estimates in recent times) and valuations remaining elevated, we do not expect significant outperformance of equities over bonds. Also, risk premium is increasing due to growth slowdown, whereas a reduction in inflation makes bonds more attractive. Return moderation can lead to further moderation in developed market flows. Even if markets remain at current levels, trailing twelve-month returns of Nifty, top mid-cap, and small-cap schemes are likely to remain muted/negative as the base hardens, which can further exacerbate the correction. While India's structural story remains intact, we are in a cyclical slowdown at the mid-cycle. Historically, Nifty's earnings estimate trajectory used to be revised downwards each year (nearly 8 per cent), leading up to the financial year, but earnings cuts were minimal in this cycle, which has now begun. Across all equity cohorts, earnings growth in the second half of the financial year 2025 (H2FY25) was significantly better than that in H1FY25. However, polarisation in profits leads to polarisation in returns. Aggregate Nifty growth might appear reasonable, but is increasingly being driven by a smaller set of companies. Broad-based earnings growth in H1FY26 could lead to a bounce in the market, but our outlook remains cautious. Earnings growth seems to be the key. The government is deploying counter-cyclical tools like repo-rate cuts, CRR cuts, tax relief, and fiscal spending to revive demand and boost growth. Historically, in periods of rising stock market concentration, defensive positioning, such as FMCG, pharma, and IT, tends to outperform. Further, in an earnings growth slowdown environment, quality and low volatility factors tend to outperform. FMCG and IT constitute the bulk of the quality factor's weight and are likely to outperform over the near-to-medium term. Further, the weight of both sectors in the NSE500 index is nearly 15-16 years low, and we expect mean reversion over the next few quarters. Defence has long-term structural tailwinds such as rising government expenditure and focus on indigenisation. However, many defence stocks trade at elevated multiples with little room for near-term upside. For investors with longer horizons, this theme is likely to outperform. PSU banks will continue to lose market share with demand for retail credit normalising. We also expect margin pressure to remain higher due to faster transmission of policy rate cuts, which will keep return ratios under pressure. Be selective in this space, prefer OMCs (oil marketing companies). Despite macro-economic uncertainty in the US, we recently turned overweight on IT in our model portfolio (Good & Clean) based on three key reasons – (i) Marginal improvement in S&P500 CY25E revenue growth, which exhibits a strong correlation with tier-1 IT revenue growth. (ii) IT exhibits strong seasonality, with the bulk of returns (nearly 17 per cent median) generated in the second half of the year. (iii) IT's weight in the NSE500 index currently stands at nearly 9 per cent, the lowest since March 2009, and we expect mean reversion to manifest. (iv) IT constitutes the second highest weight in the quality factor, which outperforms in an earnings growth slowdown environment. SMID (small and mid-cap) profit contribution to the NSE500 universe has significantly accelerated since the pandemic, but peaked at 28 per cent in March 2023. However, market capitalisation contribution has remained elevated at nearly 33 per cent (all-time high), while PAT contribution currently stands at 26 per cent. Despite the recent correction, mid-caps and small-caps continue to trade at a significant premium to large-caps and their respective seven-year average multiples. Flows are also reasonable in SMID schemes. Moreover, EPS estimates trajectory appears better in large-caps versus SMIDs. Heavyweight sectors in SMID, such as capital goods and chemicals, have witnessed significant FY26E earnings downgrades in CY25TD. With expensive valuations and deteriorating earnings growth, divergence appears unsustainable. We continue to prefer large-caps over SMIDs, and within large-caps, prefer heavy-weights. We don't expect the SMID valuation premium to sustain as the built-in growth rate is too high. However, India remains one of the fastest-growing economies and is likely to outperform its emerging market peers over the long term. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
