Stock Market Today Highlights 28 November 2024: Bloodbath on D-Street; Sensex dives over 1,100 pts, Nifty below 24k

Prabhudas Lilladher, one of the most trusted financial services organisations in India, in its latest India Strategy Report stated that the Indian markets are on course but headwinds are yet to peak out. The firm has cut its base case NIFTY target to 27,381 (27,867 earlier) on Nifty EPS cut by 0.5/2.0/1.5 for FY25/26/27 and recommends selective buying on dips for long-term gains.

According to the report, demand conditions remain mixed with steady uptick in rural demand given low base and normal monsoons. However, rising inflation is affecting demand in urban India (yet to play out fully), more so in metros and big cities, which account for ~35% of the total demand in the economy. All hopes now rest on the demand surge in festival and wedding season.

PL Capital expects interest rate cut only post budget as the spike in food inflation to 10.9% (CPI increase to 6.2%) takes it much above comfort level of the RBI. The broking firm suggests stock specific approach given tepid demand scenario. PL Capital believes Capital Goods, Infra, EMS, Hospitals, Pharma, Tourism, Auto, New Energy, E-com, Jewellery are good themes to play at current valuations.

The benchmark index NIFTY50 is down 6% cut since October 12, showing the impact of Rs 72,000 crore FII selling amidst Donald Trump’s victory in US presidential elections, sustained geopolitical uncertainty, strength of USD and softening of Gold prices.

PL Capital highlights three factors that can support growth going, ahead:

1) Results of recent state/Bye elections in Maharashtra, Haryana, UP and Bihar have consolidated the position of ruling NDA which will provide much needed stability and resolve to push for reforms.

2) Trump 2.0 is likely to see some reduction in global wars, lesser geo political uncertainty and stable crude prices.

3) Expected revival in government capex as 2Q capex has turned positive and 1H capex is only 37% of FY25 BE.

PL Universe in 2Q reported Sales, EBIDTA, PAT growth of 3.2%, -2.0%, and -5.0% YoY respectively. Coverage universe posted lower sales/EBIDTA and PBT growth by 1.7/2.3/4.3% than estimates. Ex-BFSI EBIDTA declined 6.1% while PBT declined by 4.3%. Ex- O&G EBIDTA increased 0.1% while PBT declined by 3.6% YoY.

Travel, Consumer Durables, Hospitals and Capital Goods had beat in sales by 1.8-5.3%. Auto, Consumer, Metals, Oil & Gas, Chemicals, Banks and HFC reported decline in sales between 1.9-3.5%.

Banks, Capital Goods, Hospitals, Logistics, Pharma reported more than 19% EBIDTA growth YoY. Building Material, Cement, Media, Oil & Gas reported more than 20% decline in EBIDTA while Auto, consumer and HFC reported single digit EBIDTA decline. Durables, IT services and chemicals reported single digit EBIDTA growth. Consumer, Cement, Building Material, logistics, Travel and Auto reported decline in PBT.

33 out of the 50 NIFTY stocks experienced earnings downgrades for FY25 this quarter, while 41 stocks saw earnings downgrades for FY26.