Latest news with #DhirajRelli
Time of India
06-06-2025
- Business
- Time of India
Sensex up 747 pts on 'jumbo' rate cut, eco growth thrust
MUMBAI: The sensex rallied 747 points (0.9%) on Friday to close at 82,189 points after RBI cut interest rate by 50 basis points (100bps = 1 percentage point), a move that market players feel has the potential to spur economic growth with loans becoming cheaper. Tired of too many ads? go ad free now Banking and financial stocks led the day's rally that added about Rs 3.6 lakh crore to investors' wealth with BSE's market capitalisation now at slightly over Rs 451 lakh crore. Nifty closed 249 points (1%) higher at 25,003 points. Most market players said that although a cut in interest rate by RBI was almost a given, the quantum of the cut - 50bps against an expected 25bps - surprised most. Domestic funds led the day's buying with a net inflow of Rs 9,342 crore while foreign funds were net buyers at Rs 1,010 crore, BSE data showed. Dhiraj Relli, MD & CEO, HDFC Securities, said RBI's decision - 'a jumbo rate cut' - would provide significant market relief as this, along with the 100bps reduction in cash reserve ratio, is set to inject approximately Rs 2.5 lakh crore in liquidity by Nov, directly strengthening bank margins in H2 FY26 and fostering private investment growth.
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Business Standard
06-06-2025
- Business
- Business Standard
Markets cheer RBI's jumbo rate cut; Sensex ends 746.95 points higher
Benchmark equity indices surged on Friday to post their biggest single-day gains in three weeks after the Reserve Bank of India (RBI) trimmed interest rates by 50 basis points. The 30-share BSE Sensex jumped 746.95 points, or 0.92 per cent, to settle at 82,188.99. The 50-share NSE Nifty reclaimed the 25,000-level and climbed 252.15 points, or 1.02 per cent, to settle at 25,003.05. Interest-rate-sensitive realty index soared 4.74 per cent, while auto index raced 1.50 per cent and bankex climbed 1.25 per cent. Friday's rally added ₹3.6 trillion to the market capitalisation of BSE-listed firms, which now stands at ₹451 trillion. With the latest reduction, the RBI has now cut interest rates by a total of 100 basis points in 2025, starting with a quarter-point reduction in February — the first cut since May 2020. Additionally, the RBI slashed the cash reserve ratio by 100 basis points to 3 per cent, a phased cut effective between September and December. These measures are expected to inject ₹2.5 trillion into the financial system. "Several external headwinds — ranging from US tariff policies and global trade tensions to sluggish worldwide growth and geopolitical risks — have weighed on domestic economic prospects, reinforcing the rationale for monetary easing,' said Dhiraj Relli, managing director and CEO of HDFC Securities. 'With enhanced liquidity and reduced borrowing costs, conditions are now set for sustained economic momentum and a market recovery. This stimulus could propel Indian equity markets beyond their current trading range, potentially pushing the Nifty past 25,000 and toward previous highs of 26,200," Relli added. The market breadth was positive, with 2,194 stocks advancing and 1,832 declining. Barring two, all Sensex stocks gained. HDFC Bank, which rose 1.4 per cent, was the biggest contributor to Sensex gains, followed by Bajaj Finance, which rose by 4.9 per cent. Bajaj Finance was also the best performing stock on the Sensex. "Monsoon-linked sectors such as fertilisers, agrochemicals, rural finance, and two-wheelers will be in focus, backed by forecasts of an above-average monsoon in 2025. We expect Indian markets to witness a gradual upgrade, supported by positive sentiment following an anticipated rate cut by RBI and optimism surrounding a potential US-India trade agreement with officials from both sides meeting in New Delhi this week to finalise the first phase of the proposed deal,' said Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services.
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Business Standard
06-06-2025
- Business
- Business Standard
Equities rally on liquidity boost from surprise RBI repo rate cut
Indian equities rose on Friday, with benchmark indices posting their biggest single-day gains in three weeks, after the Reserve Bank of India (RBI) delivered a larger-than-expected 50-basis-point repo rate cut. The move, aimed at bolstering liquidity and stimulating economic growth amid global financial headwinds, sent rate-sensitive sectors soaring. The Sensex closed at 82,189, up 747 points (0.9 per cent), while the Nifty 50 index settled at 25,003, gaining 252 points (1.02 per cent)—marking their best performance since May 15. Both indices also ended the week in positive territory, rising about a per cent each after two consecutive weeks of losses. The rally added ₹3.6 trillion to the market capitalisation of BSE-listed firms, which now stands at ₹451 trillion. The central bank's surprise rate cut—its third in 2025—follows a 25-bps reduction in February (the first since May 2020). Additionally, the RBI slashed the cash reserve ratio (CRR) by 100 bps to 3 per cent, with a phased implementation between September and December. Together, these measures are expected to inject ₹2.5 trillion into the financial system. "Several external headwinds—ranging from US tariff policies and global trade tensions to sluggish worldwide growth and geopolitical risks—have weighed on domestic economic prospects, reinforcing the rationale for monetary easing. With enhanced liquidity and reduced borrowing costs, conditions are now set for sustained economic momentum and a market recovery. This stimulus could propel Indian equity markets beyond their current trading range, potentially pushing the Nifty past 25,000 and toward previous highs of 26,200," said Dhiraj Relli, Managing Director and CEO of HDFC Securities. The market breadth was positive, with 2,194 stocks advancing and 1,832 declining. Barring two, all Sensex stocks gained. HDFC Bank, which rose 1.4 per cent, was the biggest contributor to the Sensex's gains, followed by Bajaj Finance, which rose 4.9 per cent and was the best-performing stock on the index. 'Monsoon-linked sectors such as fertilisers, agrochemicals, rural finance, and two-wheelers will be in focus, backed by forecasts of an above-average monsoon in 2025. We expect Indian markets to witness a gradual up-move, supported by positive sentiment following the anticipated RBI rate cut and optimism surrounding a potential US-India trade agreement, with officials from both sides meeting in New Delhi this week to finalise the first phase of the proposed deal. Meanwhile, global headwinds—including unexpected shifts in US tariffs and ongoing geopolitical tensions—may induce volatility,' said Siddhartha Khemka, Head of Research – Wealth Management, Motilal Oswal Financial Services.
Time of India
26-05-2025
- Business
- Time of India
Rs 7 lakh crore boom in just 10 days! Is the smallcap stocks party getting out of hand?
Smallcap stocks have surged, adding Rs 7.3 lakh crore to investor wealth in just 10 sessions, fueled by stock-specific triggers and retail investor enthusiasm. While some experts see justified valuations due to growth, others caution against stretched valuations and potential herd behavior, highlighting the risks of chasing momentum after a prior correction. The rally's sustainability remains questionable. Tired of too many ads? Remove Ads Momentum Meets Narrative Tired of too many ads? Remove Ads A Bounce from the Bottom Not a Rising Tide for All Are Valuations Justified? Tired of too many ads? Remove Ads As small is turning out to be beautiful once again, smallcap stocks have added a jaw-dropping Rs 7.3 lakh crore to investor wealth in just 10 trading sessions — a 10% surge in the BSE SmallCap index that has caught both retail and institutional investors off guard. The sharp rally, led by explosive moves in names like Nelcast and Cosmo First (both up 65%) and GRSE (up 55%), has sparked fresh debate: is this a sustainable rebound or another round of frothy FOMO?A total of 46 stocks have surged at least 30% in the last 10 days, with names such as TTML Angel One and Titagarh Rail among the standout performers. The breadth of the rally has been remarkable — out of nearly 980 stocks in the BSE SmallCap index, fewer than 70 have delivered negative returns during this rally, while widespread, has been driven by a combination of stock-specific triggers, sectoral tailwinds, particularly in defence and railways, and liquidity-led buying from retail investors eager to ride the next big wave.'The recent ferocious rally in defence stocks post the recent skirmish (Operation Sindoor) is yet another example of greed or FOMO taking over rational investing behaviour,' said Atul Bhole, EVP & Fund Manager at Kotak Mahindra AMC. He noted that several small and midcap (SMID) stocks had earlier suffered value erosion of 40-60% between mid-2024 and early 2025, largely due to momentum-driven buying without fundamental warns that while mutual funds and institutional investors have sidestepped many of these traps, retail participants may not have learned their lesson: 'The market is like a voting machine in the short term and keeps attracting new investors or making the same investors repeat newer mistakes.'Dhiraj Relli, MD & CEO of HDFC Securities, said the rally comes on the heels of a brutal correction: 'Midcap and small cap indices corrected 20-22% earlier this year, with many stocks falling 25-40%, which made valuations more attractive.' Sectors like railways, defence, and metals have since staged sharp Relli cautioned that investors chasing momentum need to tread carefully. 'Valuations in several segments have again become expensive. While smallcaps offer high return potential, they also come with high risk.'Rupak De, Senior Technical Analyst at LKP Securities, argued the current rally might be masking deeper issues. 'Many broader market stocks continue to look vulnerable to selling pressure. A handful of quality names are pulling up the smallcap and midcap indices, creating the illusion of broad strength.'He emphasized that this isn't 2023 anymore: 'This time around, the market will truly test your stock-picking skills.'Despite concerns, some strategists see merit in the rally. Seshadri Sen of Emkay Global noted that high valuations in the SMID space may not be as alarming as they appear. 'We do not see any bubble in SMIDs. High valuations are supported by growth and improved earnings quality,' he said. Sector composition differences between large caps and small/midcaps, he argues, explain much of the divergence in price-to-earnings not everyone is buying the Equities flagged that 30% of new mutual fund investors have entered the markets in the past two years, with disproportionate flows into midcap, smallcap, and thematic funds — a pattern that raises red flags around sustainability. Many of these investors are still heavily invested in 'narrative' stocks, despite last year's harsh Rs 7.3 lakh crore question is not whether smallcaps can rally but whether this rally is built on solid ground or destined to unravel under the weight of stretched valuations and herd behaviour. For now, momentum is in control — but fundamentals may soon have their say.(Data: Ritesh Presswala): Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
23-05-2025
- Business
- Time of India
If earnings growth fails to materialize, markets will struggle, warns HDFC Securities' Dhiraj Relli
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Following the recent rally, Dhiraj Relli, MD & CEO, HDFC Securities , says Nifty valuation looks reasonable given strong growth expectations, despite downward revisions to FY25 forecasts after the subdued first he warns that if earnings growth fails to materialize, markets will struggle to sustain current valuation excerpts from a chat:Amid a turbulent global macroeconomic environment marked by trade wars, India has demonstrated remarkable resilience in its economic fundamentals. Inflation continues to cool, fuelling expectations of further rate cuts by the Reserve Bank of India . Markets rallied following Trump's 90-day tariff pause and strengthened further after the India-Pakistan ceasefire, despite experiencing significant volatility in the oil prices and India's potential to benefit from the reconfiguration of global supply chains provide additional support in the medium term. With goods exports to the US accounting for less than 5% of India's GDP, the economy is effectively cushioned from direct trade impacts. Indian policymakers have also responded swiftly to resolve trade issues, which should help mitigate potential subdued earnings growth in previous quarters, promising signs are emerging in the current earnings season. Strong rural demand, normal monsoon conditions, favourable tax measures, and a benign interest rate environment indicate earnings recovery in upcoming quarters. Robust performance in financials, automotive, and oil & gas sectors has attracted foreign institutional investor project mid-teen earnings growth over the next 18-24 months. Following the recent rally, the Nifty trades at 19.5x FY27E EPS—a reasonable valuation given strong growth expectations, despite downward revisions to FY25 forecasts after the subdued first specific challenges remain: Private capital expenditure has yet to accelerate, urban consumption remains tepid, and growth in IT services could weaken amid policy uncertainties in the United earnings growth fails to materialize, markets will struggle to sustain current valuation investors consistently gravitate toward low-priced stocks in pursuit of higher returns. Last year's remarkable momentum in select midcaps and small caps has led to significant overvaluation, with many stocks trading at 50-70x one-year forward the first few months of the calendar year 20025, midcap and small cap indices experienced a substantial correction of 20-22%, with many stocks falling 25-40%. This correction rendered overall valuation multiples considerably more attractive. Recent weeks have witnessed notable rebounds in a few sectors, including Railways Defence , and Metals. However, caution is warranted as valuations in several segments have again become mid- and small-cap stocks offer higher return potential, they come with corresponding risks. Sharp performance divergences among individual stocks within any sector are is advisable to select stocks based on their individual merits and fundamentals, a bottom-up approach to IPOs typically range from ₹10 to ₹40 crore in size. These modest offerings frequently trigger intense speculation during listing. The BSE SME IPO Index has declined 17% year-to-date, with one-third of constituent stocks still trading below their listing prices. The median decline among constituents is 18%, indicating that investor losses have matched broader small-cap performance. Notably, approximately 50% of these stocks have underperformed the benchmark must, therefore, exercise extreme selectivity when considering IPO applications or pursuing post-listing momentum. Just a few months ago, regulators issued cautionary guidance on this stocks have experienced a robust upward trajectory over the past two weeks. Several stocks recorded gains of up to 39%, while the Defence index surged 18% since the commencement of Operation Sindoor. In contrast, the benchmark Nifty 50 advanced just over 2% during the same sharp rally in the defence sector has been fuelled by the resounding success of Operation Sindoor, which not only achieved its strategic objectives but also showcased India's rapidly advancing technological capabilities in modern warfare. Indigenous platforms—including drone combat systems, layered air defence networks, and electronic warfare capabilities—played pivotal roles in the operation, significantly boosting investor sentiment toward the stocks have rebounded strongly following a prolonged price correction between July 2024 and March 2025. This recovery has been supported by favourable geopolitical developments and government approvals for orders worth ₹54,000 crore. Supply-side constraints that previously hampered the sector have now been defence stocks are now fairly valued in the short run except for a few outliers. Given the emerging strategic environment, these stocks are poised to continue their upward trajectory. We maintain a positive outlook on the sector's long-term subdued growth in previous quarters, Q4FY25 has delivered improved earnings results. Strong rural demand, normal monsoon conditions, favourable tax measures, and a benign interest rate environment collectively signal earnings recovery in upcoming and small-cap stocks have historically delivered superior returns with corresponding higher risk profiles. Selective positioning in specific sectors and stocks remains essential. Markets have consistently demonstrated stock-specific performance patterns throughout history. Even within the same industry, individual stocks often exhibit sharp performance FY26, several key themes are poised to influence equity markets. With inflation now within RBI's 4-6% target band, monetary easing appears imminent. This and strengthening investments across public and private sectors should bolster economic growth in the coming fiscal year. Our sector preferences for FY26 are ranked as follows:India is experiencing a robust multi-year capital expenditure revival cycle. Over the past five years, the Central government has accelerated capex initiatives to foster sustainable, investment-led growth nationwide. Private sector capex has also shown remarkable strength between FY21 and FY25E, achieving a 19.8% CAGR. This momentum will likely intensify in FY26, driven by India's focus on domestic manufacturing, continued government infrastructure initiatives, and healthy corporate balance sheets—collectively fuelling a multi-year investment financial sector continues to exhibit strong credit growth, stable asset quality, and improving return ratios. Valuations remain reasonable relative to the sector's earnings sector faces headwinds from sluggish urban demand, delayed rural recovery, and persistent inflation. Volume growth has underperformed, and price increases have supported revenue growth. While recent tax reductions and signs of rural demand recovery offer some encouragement, margin pressures and relatively high valuations suggest limited upside subdued performance in previous quarters, earnings growth has shown notable improvement. Consensus forecasts project mid-teen earnings growth over the next two years, creating a favourable market environment. After the recent rally, Nifty trades at 19.5x FY27E EPS—a reasonable valuation given strong growth risks include tariff wars, earnings shortfalls, and geopolitical do not anticipate Nifty reaching 30,000 in investment strategy emphasises searching for quality companies with proven track records, clear earnings visibility, and reasonable valuations, rather than basing decisions on Nifty index levels. We seek businesses offering accelerated earnings growth and rerating potential, always ensuring a reasonable margin of safety in double dose of geopolitical strains has prompted investors to pause and recalibrate their investment strategies. India has remained largely resilient throughout these events, underscoring its macroeconomic fundamentals and economic strength. However, such global developments reinforce the importance of diversification in mitigating unsystematic risks. Ultimately, these situations remind us that investors who focus on long-term quality companies at reasonable valuations will remain largely insulated from the intermittent volatility created by external shocks.
