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India.com
2 days ago
- Business
- India.com
Nifty Financial Services Index Becomes Best-Performing Sector, Surges 15.5% In H1 2025
New Delhi: The Indian financial services sector emerged as the top-performing space in the first half of 2025, as the Nifty Financial Services Index rose nearly 15.5 per cent year-to-date (YTD), according to latest data from Nifty on Friday. This strong rally outpaced other sectoral indices and reflected growing investor confidence in the sector's strength and improving economic conditions. On Friday, the index hit an all-time high of 27,305.6 during intra-day trading, marking an approximately 22.19 per cent jump from its 52-week low of 22,320.85. A 1.5 per cent rise in the Thursday session further boosted its upward momentum, supported by easing geopolitical tensions, falling crude oil prices, and a softer US Dollar Index. These factors are attracting foreign portfolio investors to Indian markets. Domestic institutional investors (DIIs) have also played a key role in supporting the rally. Investor sentiment is also being lifted by hopes of strong corporate earnings in the April-June quarter of FY26, especially in banking, insurance, and other financial services. The Nifty Financial Services Index has delivered a steady performance over the past year, gaining 15.4 per cent. In the past four months alone, it rose 3 per cent in June, 1.3 per cent in May, 6.5 per cent in April, and 9.2 per cent in March. The only weakness came at the beginning of the year, with slight declines of about 1.7 per cent in January and 0.6 per cent February. A major reason for the recent optimism is the Reserve Bank of India's final guidelines on project finance. The central bank softened its earlier draft norms, easing concerns around asset quality. According to Motilal Oswal Financial Services (MOSL), the new rules reduce the amount of money lenders need to set aside for under-construction projects. Also, the guidelines won't apply to older loans where financial closure is already complete. MOSL said that under the new rules, standard provisioning for such loans has been reduced to around 1–1.25 per cent from the earlier proposed 5 per cent. Once the projects become operational, the provisioning can go down further to as low as 0.4 per cent, depending on the type of project.
Mint
3 days ago
- Business
- Mint
At record high! Nifty Financial Services emerges as best-performing sector in H1 2025, rallies nearly 16%
The Indian financial services sector stood tall in the first half of 2025, emerging as the best-performing space among broader market segments. The Nifty Financial Services Index surged almost 16 percent year-to-date (YTD), outpacing other sectoral peers and underscoring investor confidence in the sector's robust fundamentals and improving macroeconomic backdrop. The index touched its record high of 27,249 in intra-day deals today, reflecting a sharp 22 percent rally from its 52-week low of 22,320.85. With a 1.5 percent gain in the most recent session, the momentum remains strong as the broader market sentiment benefits from easing geopolitical risks, falling crude oil prices, and a weakening US Dollar Index, all of which are encouraging foreign portfolio inflows into Indian equities. Domestic institutional investors (DIIs) have also been steadfast in their support, adding to the rally. Market optimism is further fueled by hopes of a healthy revival in corporate earnings in the June quarter of FY26, particularly in sectors like banking, insurance, and diversified financials. In the past one year, the Nifty Financial Services Index has jumped 14 percent, with sustained upward momentum seen over the past four months. It added 2.7 percent in June so far, following gains of 1.5 percent in May, 4 percent in April, and 9 percent in March. The index did see some moderation early in the year, declining by nearly 1 percent in both January and February. Among the 20 constituents of the Nifty Financial Services Index, only three stocks were in the red during H1 2025. Leading the charge was SBI Cards, which rallied a robust 47.5 percent, followed closely by MCX, which gained 41 percent in the first six months. Other major gainers included Bajaj Finance, Bajaj Finserv, Cholamandalam Investment and Finance Company, and SBI Life, each of which delivered gains of over 30 percent in 2025 so far. Stocks like Kotak Mahindra Bank, Shriram Finance, Muthoot Finance, HDFC Life, and HDFC Asset Management also delivered healthy returns in the 20–30 percent range, reflecting broad-based strength in the financial services sector. However, a few laggards dragged the index slightly. REC emerged as the worst performer, declining nearly 20 percent, followed by PFC, which dropped 6.6 percent, and ICICI Prudential Life Insurance, which shed just over 1 percent. One of the key developments supporting sentiment in financial names was the Reserve Bank of India's (RBI) announcement of final guidelines on project finance, which significantly toned down earlier draft proposals. According to Motilal Oswal Financial Services (MOSL), the most notable change is the relaxation in provisioning norms for under-construction loans. 'The final guidelines are much milder than expected and won't apply retrospectively,' MOSL said, noting that loans with financial closure already completed will continue under the old provisioning framework. This change provides relief to lenders and removes overhang on asset quality concerns for under-construction projects. MOSL also highlighted that the revised standard asset provisioning now stands at around 1–1.25 percent, down sharply from the initially proposed 5 percent. During the operational phase, provisioning further eases to 0.4–1 percent depending on project type. Among non-banking financial companies (NBFCs), PFC and REC are likely to benefit the most due to their high project loan exposure and adequate provisioning buffers. 'As of March 2025, Stage 1 and 2 provisioning stood at 1.13 percent and 0.95 percent, respectively,' MOSL said. Other financial players such as Bajaj Housing Finance, LIC Housing Finance, Piramal Enterprises, and L&T Finance could face higher provisioning costs from October 2025 onwards, but these are likely to be passed on to borrowers, easing the impact on profitability, MOSL added. Overall, the sharp rally in the Nifty Financial Services Index in H1 2025 highlights renewed investor faith in India's financial sector. As macro headwinds ease and regulatory clarity improves, the sector appears well-positioned for sustained performance. With corporate earnings recovery on the horizon and robust support from both foreign and domestic investors, the momentum in financial services stocks could persist through the remainder of the year. Key names like SBI Cards, Bajaj Finance, and MCX are already leading the charge, and broader tailwinds may continue to lift the sector further. 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.
Mint
3 days ago
- Business
- Mint
SBI, HAL to BEL: MOSL lists top PSU stocks to buy as valuations remain attractive
Indian public sector undertakings (PSUs) have experienced a remarkable revival in recent years, with Motilal Oswal Financial Services (MOSL) spotlighting their long-term potential in a detailed report. While FY25 brought in some normalisation after a stellar post-COVID run, MOSL says the foundational strength of PSU businesses remains intact. The brokerage believes select PSUs across banking, defence, and energy sectors remain well-positioned to generate wealth over the next several years. 'Our top PSU ideas are SBI, HAL, BEL, PowerGrid and Coal India,' said MOSL in its latest note. MOSL highlighted that PSUs delivered a compounded annual profit growth (PAT CAGR) of 36 per cent during FY20–25—higher than the 30 per cent reported by India Inc overall and far ahead of the private sector's 26 per cent. This robust profit performance contributed to a 32 per cent CAGR in the BSE PSU Index during the same period, significantly outpacing the Nifty50's 19 per cent CAGR. 'FY25 did witness some moderation,' MOSL acknowledged, noting that overall PSU profits dipped 2 per cent YoY, primarily due to weak performance in the Oil & Gas (O&G) sector. Excluding O&G, PSU profits rose 16 per cent in FY25, following a strong 23 per cent jump in FY24. BFSI, particularly PSU banks, was the key driver of profit growth in FY25, with PSU banks clocking a 26 per cent increase. O&G, by contrast, declined 44 per cent. 'This divergence illustrates the need to be selective in PSU exposure,' MOSL said, underlining that strength persists in sectors with structural tailwinds such as financial services, defence, and infrastructure. Importantly, the report shows that the PSU contribution to India Inc's overall profit pool surged to 37.5 per cent in FY25—up from just 29 per cent a year ago and only 18 per cent in FY20. 'The turnaround in PSU profitability is structural, not cyclical,' MOSL asserted. Valuations for PSU stocks have moderated since their peak. The BSE PSU Index's market cap hit ₹ 74 lakh crore in July 2024, then declined to ₹ 51 lakh crore in February 2025 amid a broader correction, before rebounding to ₹ 64 lakh crore in June. The current market cap stands 14 per cent below its all-time high, providing room for upside, according to MOSL. The BSE PSU Index now trades at a P/E of 11.7x, down from 13.8x in July 2024 and up from 9.8x in February 2025, suggesting more reasonable valuations. The PSU Index delivered a 10 per cent CAGR over the last decade (June 2015–June 2025), underperforming the Nifty50's 12 per cent CAGR. However, most gains came in the second half of the decade. The index contracted 9 per cent between 2015–2020, but rebounded with a strong 32 per cent CAGR from 2020 to 2025. Notably, the share of loss-making PSUs in the overall profit pool fell dramatically—from 45 per cent in FY18 to just 1 per cent in FY25. 'The PSU basket is no longer dragged by chronic underperformers,' said MOSL, noting a meaningful transformation in efficiency and governance. Looking ahead, MOSL expects a 10 per cent PAT CAGR for its PSU coverage universe over FY25–27. This growth will be led by BFSI (53 per cent contribution to incremental profits), followed by O&G (20 per cent), and Metals (12 per cent). Strategically, MOSL is bullish on select PSUs that benefit from policy tailwinds, Make-in-India initiatives, and infrastructure push. SBI remains a top pick due to robust credit growth and stable asset quality. HAL and BEL are favoured for their role in defence indigenisation, while PowerGrid benefits from power transmission investments. Coal India also finds favour due to its consistent cash generation and role in India's energy security.
Mint
3 days ago
- Business
- Mint
PSU stocks still attractive: MOSL lists top long-term bets including SBI, HAL, BEL
Indian public sector undertakings (PSUs) have experienced a remarkable revival in recent years, with Motilal Oswal Financial Services (MOSL) spotlighting their long-term potential in a detailed report. While FY25 brought in some normalization after a stellar post-COVID run, MOSL says the foundational strength of PSU businesses remains intact. The brokerage believes select PSUs across banking, defence, and energy sectors remain well-positioned to generate wealth over the next several years. 'Our top PSU ideas are SBI, HAL, BEL, PowerGrid and Coal India,' said MOSL in its latest note. MOSL highlighted that PSUs delivered a compounded annual profit growth (PAT CAGR) of 36 percent during FY20–25—higher than the 30 percent reported by India Inc overall and far ahead of the private sector's 26 percent. This robust profit performance contributed to a 32 percent CAGR in the BSE PSU Index during the same period, significantly outpacing the Nifty50's 19 percent CAGR. 'FY25 did witness some moderation,' MOSL acknowledged, noting that overall PSU profits dipped 2 percent YoY, primarily due to weak performance in the Oil & Gas (O&G) sector. Excluding O&G, PSU profits rose 16 percent in FY25, following a strong 23 percent jump in FY24. BFSI, particularly PSU banks, was the key driver of profit growth in FY25, with PSU banks clocking a 26 percent increase. O&G, by contrast, declined 44 percent. 'This divergence illustrates the need to be selective in PSU exposure,' MOSL said, underlining that strength persists in sectors with structural tailwinds such as financial services, defence, and infrastructure. Importantly, the report shows that the PSU contribution to India Inc's overall profit pool surged to 37.5 percent in FY25—up from just 29 percent a year ago and only 18 percent in FY20. 'The turnaround in PSU profitability is structural, not cyclical,' MOSL asserted. Valuations for PSU stocks have moderated since their peak. The BSE PSU Index's market cap hit ₹ 74 lakh crore in July 2024, then declined to ₹ 51 lakh crore in February 2025 amid a broader correction, before rebounding to ₹ 64 lakh crore in June. The current market cap stands 14 percent below its all-time high, providing room for upside, according to MOSL. The BSE PSU Index now trades at a P/E of 11.7x, down from 13.8x in July 2024 and up from 9.8x in February 2025, suggesting more reasonable valuations. The PSU Index delivered a 10 percent CAGR over the last decade (June 2015–June 2025), underperforming the Nifty50's 12 percent CAGR. However, most gains came in the second half of the decade. The index contracted 9 percent between 2015–2020, but rebounded with a strong 32 percent CAGR from 2020 to 2025. Notably, the share of loss-making PSUs in the overall profit pool fell dramatically—from 45 percent in FY18 to just 1 percent in FY25. 'The PSU basket is no longer dragged by chronic underperformers,' said MOSL, noting a meaningful transformation in efficiency and governance. Looking ahead, MOSL expects a 10 percent PAT CAGR for its PSU coverage universe over FY25–27. This growth will be led by BFSI (53 percent contribution to incremental profits), followed by O&G (20 percent), and Metals (12 percent). Strategically, MOSL is bullish on select PSUs that benefit from policy tailwinds, Make-in-India initiatives, and infrastructure push. SBI remains a top pick due to robust credit growth and stable asset quality. HAL and BEL are favoured for their role in defence indigenization, while PowerGrid benefits from power transmission investments. Coal India also finds favour due to its consistent cash generation and role in India's energy security. Overall, while FY25 marked a normalization phase for PSU stocks after an extraordinary post-pandemic rally, MOSL believes the long-term story remains compelling. 'With solid fundamentals, improving governance, and favourable policy tailwinds, PSUs deserve a spot in long-term investor portfolios,' the brokerage said. The transformation of Indian PSUs from inefficient state behemoths to efficient, growth-oriented enterprises is well underway—and investors who spot the structural shifts early could be handsomely rewarded. 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.
Mint
13-06-2025
- Business
- Mint
Earnings Review: These companies post over 50% YoY rise in Q4 net profits
Domestic brokerage house Motilal Oswal Financial Services (MOSL) has said that the fourth-quarter earnings season for FY25 concluded on a robust note, with broad-based outperformance across key sectors. In its post-earnings analysis, MOSL pointed out that strong results from metals, oil marketing companies (OMCs), PSU banks, automobile firms, healthcare players, capital goods manufacturers, and technology companies were the primary drivers of the strong quarterly performance. According to MOSL, the Nifty 50 delivered a 3 percent year-on-year growth in profit after tax (PAT), slightly ahead of its earlier estimate of 2 percent growth. It noted, however, that this marked the fourth straight quarter of single-digit profit growth since the post-pandemic rebound began in June 2020, suggesting a phase of consolidation in corporate profitability. Despite near-term uncertainties, including global macroeconomic headwinds, potential trade disruptions, and earnings volatility, MOSL remains optimistic about India's structural growth trajectory. It stated that while short-term market sentiment could remain jittery, the medium-to-long-term growth story of India continues to remain intact. MOSL also pointed out several standout performers from the earnings season, noting that a number of companies posted over 50 percent year-on-year growth in net profit for the March quarter. These earnings surprises further underscore the resilience and strength of select sectors despite a backdrop of global uncertainty. Bharti Airtel delivered a strong 432 percent year-on-year surge in net profit to ₹ 11,022 crore in Q4FY25. However, excluding exceptional items, the adjusted profit stood at ₹ 5,223 crore, reflecting a solid 77 percent year-on-year growth. The telecom giant attributed the performance to strong growth momentum in India, a currency rebound in African markets, and the full-quarter impact of the Indus Towers consolidation. Revenue rose 27 percent year-on-year to ₹ 47,876 crore, driven by better average revenue per user (ARPU), which increased to ₹ 245 from ₹ 209 in the year-ago period. The Board recommended a final dividend of ₹ 16 per share for FY25, reinforcing shareholder value amid improving fundamentals. Hindalco Industries reported a 66 percent jump in consolidated net profit to ₹ 5,283 crore in Q4FY25, up from ₹ 3,174 crore in the same quarter last year. The company said this robust performance was largely driven by its Indian operations, supported by favourable macroeconomic conditions and declining input costs. Revenue from operations rose 16 percent year-on-year to ₹ 64,890 crore, while consolidated EBITDA climbed 43 percent to ₹ 10,296 crore. The company's board proposed a final dividend of ₹ 5 per share for FY25, subject to shareholder approval at the forthcoming AGM. Apollo Hospitals Enterprise Ltd reported a 59.3 percent rise in net profit to ₹ 411.5 crore for the March quarter, compared to ₹ 258.4 crore a year ago, beating analyst estimates. Strong patient volumes and operational efficiencies helped improve margins. Revenue for the quarter stood at ₹ 5,592.2 crore, up 13.1 percent year-on-year, aligning closely with Street expectations. EBITDA increased by 20.2 percent to ₹ 769.7 crore, while the operating margin expanded to 13.76 percent, surpassing the market estimate of 13.70 percent and improving from 12.96 percent in the same quarter last year. 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.
