Economists are currently anticipating that the stock market second-quarter GDP growth will outperform the RBI estimate by 50 basis points. Analysts predict that the Q2 real GDP is poised to expand at a rate of 7.0%, surpassing the RBI’s projection of 6.5%. The official announcement of the September quarter’s GDP growth is scheduled for the final business day of November. Brokerage firms have already adjusted their GDP forecasts for FY24, aligning them closer to the 6.8% mark. Notably, the upswing, even during the second quarter, is expected to be primarily powered by the services sector, while the manufacturing sector is anticipated to exhibit strong performance.
If the market grapevine is to be believed, Adani group may be in advanced talks to exit its JV with Wilmar in the FMCG business. As of now, it is not clear whether Wilmar will buy the business or whether a new entity would come in. Valuations are expected to deliver up to $3 billion to Adani Group for its stake in the Adani Wilmar business. Adani Wilmar owns the highly popular Fortune brand in India, but it has been more of a B2B player and has never got attractive valuations. The funds will be deployed in infrastructure.
Inflows into India-linked ETFs (exchange-traded funds) are likely to cross the peak flows of October 2014 as there is a surge of interest in India-dedicated ETFs all over again. Net inflows into India dedicated ETFs for 2023 till date stood at $2.4 billion, which is nearly 20% higher than the last record infusion in 2014. It is not just the large-cap ETFs that investors are looking at to participate in the macro-India story but also the mid-cap names in search of alpha. India-dedicated ETFs like iShares MSCI will outperform in 2023.
Fresh demat additions in the month of October 2023 dipped below the 30 lakh mark. However, demat account openings were still robust at 26.8 lakhs in the month. As of the close of October 2023, there are a total of 13.20 crore demat accounts in India, with CDSL dominating the number of accounts and NSDL dominating in terms of assets under custody (AUC). The demat account openings are a function of IPOs in the month and secondary market interest levels, volatility, returns on the market, and other macros.
Hindustan Petroleum (HCPL) bounced back to report a net profit of Rs5,827 crore in Q2 FY24. Low crude prices in the quarter helped the company bolster its profit margins. However, low oil prices also meant that top lien revenues were lower by 10% yoy at Rs1.02 trillion in the September quarter. However, the net profits were lower by 14% sequentially due to a recent rally in crude prices from $71/bbl to a recent high of $96/bbl. Prices have tapered since then. However, gross refining margins (GRM) in H1 was lower.
In the latest quarter, Delivery may have disappointed in terms of operating performance, but brokerage house Jefferies appears to be quite positive on the stock. They have also come out with an upside target of 55% from current levels on the stock. Jefferies is betting on the dominant position held by Delhivery in the B2C space, even as it is gaining traction in the B2B space. The reduction in loss was less than what analysts had expected, but the impact will be marginal. The price target for the stock is set at Rs605 per share.
Divi’s Labs had a disappointing quarter, with net profits falling 29.4% in Q2 FY24 to Rs 348 crore. Revenues from operations were up 2.9% at Rs 1,909 crore. Both the sales and profits were much below estimates for the street. Divi’s Labs has been one of the dominant players in the Indian API business. Active Pharma Ingredients (APIs) are the inputs that go into medicines and were formerly called bulk drugs. This line of business has been under pressure for some time due to rising competition and falling bargaining power.
When Zomato made the bold acquisition of Blinkit last year, not everyone was truly convinced. However, one year down the line, it looks like Blinkit is driving most of the price action in the stock. Blinkit is the quick commerce unit of Zomato. Compared to the core food business, it is the Blinkit business that sees most of the traction. Blinkit competes in the market with Dunzo and Instamart of Swiggy. However, there is a massive demand for rapid delivery today and even the margins in that business are likely to improve.