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Shares of PSU company Hindustan Aeronautics (HAL) today surged 4% to an intraday high of Rs 4,246 on the BSE today after the company on Thursday reported a consolidated net profit of Rs 1,510 crore for the quarter that ended September 30, 2024, rising 22% over Rs 1,237 crore reported in the year-ago period.The revenue from operations stood at Rs 5,976 crore, gaining 6% over Rs 5,636 crore posted by the company in the corresponding quarter of the previous financial year.On a sequential basis, the profit after tax (PAT) was 5% higher over Rs 1,437 crore reported by the state-run defense company in Q1FY25. Meanwhile, revenue was up 37% on a quarter-on-quarter (QoQ) basis as against Rs 4,34,750 reported in the April-June quarter of FY25.Post the company’s Q2 update, domestic brokerage firm ICICI Securities gave a target price of Rs 5,170 on the stock while maintaining its ‘add’ rating on the same.“Taking cognisance of the delay in engines, impacting revenue from Tejas Mk-1A, wehave lowered our FY25/26E EBITDA by 16%/4%, respectively. Furthermore, owing tothe uncertainty surrounding earnings, we are raising the discount rate (WACC) by100bps to 11% in our DCF model,” said the domestic brokerage firm in its report.Delay in execution of existing 83 Tejas Mk-1A orders and in the receipt of further orders for which AoN has been executed along with a margin decline owing to higher raw material prices have been stated as the key risks for the company.Shares of HAL have been making lower tops and lower bottoms on its daily chart, having taken a fall after hitting an all-time high of Rs 5,674.75 in July this year.Since then, the stock has corrected by almost 30% since then and by 8.55% in the last one month.Also read: Last day to buy MRF shares for dividend eligibility as stock trades ex-dividend tomorrowOn the stock’s daily chart, the shares price recently encountered a resistance near the Ichimoku cloud, which led to a correction of around 6-7% in just a week’s time. Now, the stock is below all its significant short, medium and long term EMAs.“A decisive close below Rs 4,100 could intensify the downside pressure, potentially driving the stock toward the Rs 3,700- Rs 3,850 range. On the upside, any rebound may face significant resistance in the Rs 4,400-4,650 zone, said Ajit Mishra - SVP, Research at Religare Broking.Mishra advised traders to adjust their positions based on these levels.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Shares of Mahanagar Gas and Indraprastha Gas fell up to 18% on Monday after the government cut the Administered Price Mechanism (APM) allocation to city gas distribution firms by 20% for the second consecutive month. Mahanagar Gas shares dropped to Rs 1,075, while Indraprastha Gas shares slid to Rs 324.8.The brokerage slashed its target price for MGL by 35% to Rs 1,164 and for IGL by 31% to Rs 373, reflecting downward revisions in EBITDA estimates, concerns about slower volume growth, and expectations of narrower profit margins in the coming years.For IGL, EBITDA per standard cubic meter (scm) has been slashed by 26.4% for FY25, with the long-term EBITDA average revised down from Rs 8.1/scm to Rs 6.5/scm. MGL faces similar challenges, with its long-term average EBITDA/scm reduced to Rs 10.42, reflecting a 16% decline.Also Read: HAL shares rally 4% after Q2 PAT jumps 22% YoY to Rs 1,510 crore The sudden and successive cuts in APM gas allocation have disrupted the CGD sector, which had gradually adapted to previous allocation reductions, bringing it from 94% to under 70%. However, the accelerated pace of these cuts has caught companies off guard, forcing them to rely more heavily on expensive LNG to meet demand.The additional costs are expected to lead to significant CNG price hikes, which could erode consumer affordability and further compress margins. Nirmal Bang estimates that EBITDA growth for both companies will remain under pressure through FY27, with limited scope for operational recovery in the near term.While the government has shown support for CNG as a cleaner fuel alternative, policy actions have been somewhat inconsistent. The brokerage suggests that relief measures, such as excise duty cuts, could partially offset the financial burden. A reduction of 5-6% in excise duties could lower CNG prices by Rs 3-4 per kilogram, providing some relief to consumers and aiding volume recovery. However, the lack of a clear long-term policy framework continues to weigh heavily on investor sentiment.Also Read: Zinka Logistics IPO Day 3: GMP, price band, subscription, key dates and reviewFinancial forecasts for the companies suggest a challenging outlook. For FY25, IGL’s revenue is projected to grow by 9%, but PAT is expected to decline by 26%, with EBITDA margins revised down to 11%. MGL is likely to see a 7.5% increase in revenue, but PAT is forecasted to drop by 21%, with EBITDA margins reduced to 22% from the earlier estimate of 24%.The broader CGD sector is facing rising costs, regulatory uncertainties, and competitive pressures. While positive developments, such as price adjustments or tax reliefs, could prompt short-term rallies, the overall outlook remains uncertain. Investors are likely to remain cautious until the sector demonstrates clear signs of operational recovery and policy stability.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Mumbai: India is expected to be the second-biggest draw for global investments after the US during Donald Trump's second term as the president, a top Wall Street banker said.Investors, who are sitting on more than $3 trillion to deploy, would be choosy and there would be a divergence of flows between the public and private markets, driven by the returns outlook, said Viswas Raghavan, executive vice-chairman at Citigroup Inc."We have spent quite some time looking at and assessing these flows... The biggest market of inward investment is the US and the second biggest market is India," he said.As Trump pushes for the US to become a manufacturing hub again, multinational companies are redrawing their investment plans. While policy changes could unsettle the global business order, they are expected to boost jobs in the US.India-being a market by itself and on the right side of Trump-could be a beneficiary, said Raghavan, who grew up in Mumbai.Energy, infrastructure and consumer will be the dominant themes for international investors here even as there is a need to shift to environmental-friendly sources and address the needs of the huge population, he said."The beauty of something like India is whatever you can produce, you can also consume," Raghavan said. "Whereas if you take a United Kingdom or other country, you need to ship it around." Rising incomes and unmet demand of the population make India the best market for goods and services, he said. 'Question Really Around Valuations' With the government's thrust on manufacturing, the rise of a new wealthy class, and the economy projected to grow at a compound annual rate of 7% - highest among major markets - the investment flows are set to increase, Raghavan said. "The question really is around valuations," he said. "In almost three to four years, we are seeing that earnings are not supporting.''Indian stock markets have provided the best returns among emerging markets over the past two decades in US dollar terms, as earnings grew. But that seems to have hit a wall, with portfolio investors selling a record $13 billion in the past two months, as valuations at more than 22 times forward year earnings appear expensive, with faltering profit growth.Booming wealth and banking reforms have also made Indian corporates deleverage, and they are at the forefront of the global stage, providing opportunities for Citigroup to rebuild its business, Raghavan said. His presence at the top could help accelerate it."Now we have companies who are absolutely best in class, who can do a phenomenal job in putting India on the world stage," Raghavan said. "If somebody comes to me, gives me an Indian name, saying they want to do so-and-so, I don't need to go and find out what the company does. I've grown up with many of these names. There's no discovery process."Pushing Advisory BusinessCitigroup, as part of its global restructuring to improve its profitability, sold off its retail business in Asia, including in India. It remains a corporate bank in most parts of the world.Raghavan, who spent decades in JPMorgan, driving its European business, was hired by Citigroup chief executive Jane Frazer to rebuild its corporate banking.One of his main agendas is to drive the fee income and regain market share in its advisory business. Citi has been a laggard among Wall Street firms in this space. Raghavan is putting building blocks to regain the lost glory."I have three verticals (corporate, commercial, investment banking). The drive, very much, is to get ourselves organised, and effectively bring those three businesses and thread them very, very closely together," he said.After the global financial crisis, all full-fledged Wall Street banks were restricted by regulation from taking disproportionate risks. While peers JPMorgan and Bank of America came back, Citi remained risk averse in funding clients in risky bets such as takeovers, especially by buyout firms. As a result, Citi's share of leveraged loans has fallen to less than 4%, from more than 12% prior to the crisis.Raghavan has taken the first step to reverse the trend by partnering with Apollo Management for a $25-billion credit fund that would help it stitch takeovers with funding as well. "The thing with leveraged finance is not the availability of liquidity. You can get infinite private credit funds all crying for paper. The problem is the supply side, which is why we tied up with Apollo, with Mubadala and Athene in it," he said.

Mumbai: India is expected to be the second-biggest draw for global investments after the US during Donald Trump's second term as the president, a top Wall Street banker said.Investors, who are sitting on more than $3 trillion to deploy, would be choosy and there would be a divergence of flows between the public and private markets, driven by the returns outlook, said Viswas Raghavan, executive vice-chairman at Citigroup Inc."We have spent quite some time looking at and assessing these flows... The biggest market of inward investment is the US and the second biggest market is India," he said.As Trump pushes for the US to become a manufacturing hub again, multinational companies are redrawing their investment plans. While policy changes could unsettle the global business order, they are expected to boost jobs in the US.India-being a market by itself and on the right side of Trump-could be a beneficiary, said Raghavan, who grew up in Mumbai.Energy, infrastructure and consumer will be the dominant themes for international investors here even as there is a need to shift to environmental-friendly sources and address the needs of the huge population, he said."The beauty of something like India is whatever you can produce, you can also consume," Raghavan said. "Whereas if you take a United Kingdom or other country, you need to ship it around." Rising incomes and unmet demand of the population make India the best market for goods and services, he said. 'Question Really Around Valuations' With the government's thrust on manufacturing, the rise of a new wealthy class, and the economy projected to grow at a compound annual rate of 7% - highest among major markets - the investment flows are set to increase, Raghavan said. "The question really is around valuations," he said. "In almost three to four years, we are seeing that earnings are not supporting.''Indian stock markets have provided the best returns among emerging markets over the past two decades in US dollar terms, as earnings grew. But that seems to have hit a wall, with portfolio investors selling a record $13 billion in the past two months, as valuations at more than 22 times forward year earnings appear expensive, with faltering profit growth.Booming wealth and banking reforms have also made Indian corporates deleverage, and they are at the forefront of the global stage, providing opportunities for Citigroup to rebuild its business, Raghavan said. His presence at the top could help accelerate it."Now we have companies who are absolutely best in class, who can do a phenomenal job in putting India on the world stage," Raghavan said. "If somebody comes to me, gives me an Indian name, saying they want to do so-and-so, I don't need to go and find out what the company does. I've grown up with many of these names. There's no discovery process."Pushing Advisory BusinessCitigroup, as part of its global restructuring to improve its profitability, sold off its retail business in Asia, including in India. It remains a corporate bank in most parts of the world.Raghavan, who spent decades in JPMorgan, driving its European business, was hired by Citigroup chief executive Jane Frazer to rebuild its corporate banking.One of his main agendas is to drive the fee income and regain market share in its advisory business. Citi has been a laggard among Wall Street firms in this space. Raghavan is putting building blocks to regain the lost glory."I have three verticals (corporate, commercial, investment banking). The drive, very much, is to get ourselves organised, and effectively bring those three businesses and thread them very, very closely together," he said.After the global financial crisis, all full-fledged Wall Street banks were restricted by regulation from taking disproportionate risks. While peers JPMorgan and Bank of America came back, Citi remained risk averse in funding clients in risky bets such as takeovers, especially by buyout firms. As a result, Citi's share of leveraged loans has fallen to less than 4%, from more than 12% prior to the crisis.Raghavan has taken the first step to reverse the trend by partnering with Apollo Management for a $25-billion credit fund that would help it stitch takeovers with funding as well. "The thing with leveraged finance is not the availability of liquidity. You can get infinite private credit funds all crying for paper. The problem is the supply side, which is why we tied up with Apollo, with Mubadala and Athene in it," he said.

Mumbai: Investors' risk appetite for Indian stocks is the lowest in eight months. The Advance Decline Ratio (ADR), a widely watched indicator of investor sentiment, is at a daily average of 32% in November. Though similar to the readings in October, the ratio is lower compared to 47% in September and 51% in August.A declining ADR means more stocks are falling against the gainers and points to a weakening market."The declining ADR ratio points to the loss of risk appetite of investors as they cut bets in the broader market, turn conservative and gravitate towards low volatility and quality stocks," said Naveen Kulkarni, CIO, Axis Securities.Benchmark indices - Sensex and Nifty - are almost 10% down from their peaks made on September 27, led by a sell-off by foreign investors sparked by a rebound in Chinese equities and disappointing earnings in the September quarter. The Midcap 150 index declined 10.9%, SmallCap 250 index dropped 9.1% and the Microcap 250 fell 8.3% in this period. 115397389The latest sell-off in the broader market has been on account of the rich valuations in mid-cap and small-cap stocks. Even after the declines, their valuations are still elevated compared to large-caps."NSE Midcap 100 index is trading at almost 30% premium to Nifty 50, which is a multi-year high as a lot of retail liquidity has found its way into mid-cap stocks, driving valuations up, said Nikhil Ranka, CIO equity alternatives at Nuvama Asset Management."When markets fall, the volume in midcap typically dries up and the impact cost of selling gets magnified," said Ranka.“Due to correction driven by the foreign sell-off, most investors have witnessed around 20% erosion in their portfolios and are likely to shift to large-cap stocks until uncertainty subsides.” So far in November, overseas investors sold `24,269 crore of Indian equities after the record selling of `1 lakh crore in October. “We are shifting from a buyers’ market in the past couple of months to a sellers’ market now, amid the IPOs, QIPs and foreign selling,” said Kulkarni. “Since supply is high, investors are in no hurry and waiting for the right price.” At the end of September, FPIs held 18.5% in NSE 500 stocks amounting to $650 billion. Taking into consideration $17 billion outflows in October and November, their holdings have come down to less than 16%, which is a 12-year low, said Ranka. The Nifty is expected to make a durable bottom at around 23,000 to 23,500 level, he said. “Foreign selling should abate in December as FII activity is typically subdued towards the year-ends, investors can therefore look to deploy the excess liquidity over the next 15 days as December is anticipated to be better for the markets,” said Ranka. Extreme ADR readings are also considered to be contrarian indicators. When the ADR falls too much, it is considered a sign of the market being oversold and vice versa. Since the ADR reading is still not at the year’s lowest level. which was 21,9% in March, investors are wondering whether the worst is over. “It is not a raging bull market that we are in but over the next 6 months to one year Nifty could deliver a 13% to 14% return, which is not bearish at all,” said Kulkarni. “The pace of rebound in the markets is however expected to be sluggish.”