The Indian stock market experienced a substantial downturn on October 25, 2024, with both the Sensex and Nifty indices dropping nearly 1% amid a challenging global and domestic environment. This marked the fifth consecutive session of losses for the Nifty and resulted in a significant market cap erosion of nearly ₹9 lakh crore in a single day. Investor sentiment has been weighed down by foreign outflows, elevated valuations, disappointing Q2 earnings, and rising global risks such as upcoming U.S. elections and tensions in the Middle East.

Market Overview and Key Indices Performance

On Friday, the Sensex declined by 663 points, or 0.83%, to close at 79,402, falling below the psychologically important 80,000-point level for the first time since mid-August. The Nifty also fell sharply by 218.60 points, or 0.9%, closing at 24,180.80. This continued selloff brought Nifty down to 8% below its all-time high of 26,277.35, reached in late September.

In the broader market, midcap and small-cap stocks underperformed, with the Midcap index closing 1.51% lower and the Small-cap index down by 2.2%. This decline in the broader indices reflects a broad-based vulnerability across market segments, as investors shy away from riskier stocks in the face of global economic uncertainties.

Contributing Factors to the Market's Decline

The recent downturn can be attributed to several key domestic and global factors:

• Heavy Foreign Investor Outflows: Foreign institutional investors (FIIs) have been pulling out funds amid concerns over valuation levels and heightened geopolitical risks, leading to a broad selloff across market sectors.

• Global Geopolitical Concerns: Uncertainty around the upcoming U.S. elections and heightened tensions in the Middle East have exacerbated volatility in emerging markets, impacting India as well. Investors remain cautious, awaiting further clarity on geopolitical developments.

• Weak September Quarter Earnings: Quarterly earnings for several key sectors have fallen below expectations, adding to investor concerns regarding the domestic economic outlook and sector-specific performance.

Detailed Breakdown of Indices and Sector Performances

1. Sensex and Nifty Movements
   The Sensex fluctuated between 80,253.19 (high) and 79,137.98 (low) during the trading session, eventually closing at 79,402. Similarly, Nifty reached an intraday peak of 24,440.25 and a low of 24,073.9, reflecting the market’s struggle with negative sentiment and limited buying support.

2. Midcap and Small-cap Indices
   Midcap and small-cap indices both recorded declines of around 2% for the day, amplifying worries that smaller, more volatile stocks could see further selling pressure in the near term. The Nifty Midcap 50 ended 1.51% down, while the Nifty Small Cap 100 closed at 18,249.15, a drop of 401.25 points or 2.2%.

3. Bank Nifty Performance
   The Bank Nifty closed at 51,531.15, with an intraday high of 51,501.05 and a low of 50,382.1. Its recent performance metrics include:

   • Past Week: -2.51%
   • Past Month: -6.12%
   • Past Three Months: -0.2%
   • Past Six Months: +4.73%
   • Past Year: +18.58%

4. Nifty 50 Index Performance
   Despite the recent losses, Nifty 50 remains up by 11% year-to-date and has gained 26.5% over the past year, illustrating the underlying resilience in the Indian stock market even amid periodic corrections.

Top Gainers and Losers: October 25, 2024

Sensex

• Top Gainers: ITC (up 2.17%), Axis Bank (up 1.69%), Hindustan Unilever (up 0.98%), Sun Pharmaceutical Industries (up 0.53%), and Kotak Mahindra Bank (up 0.31%).
• Top Losers: Mahindra & Mahindra (down 3.93%), Larsen & Toubro (down 3.35%), NTPC (down 3.13%), Maruti Suzuki India (down 2.16%), and Tata Steel (down 2.15%).

Nifty

• Top Gainers: ITC (up 2.25%), Axis Bank (up 1.88%), Britannia Industries (up 1.02%), Hindustan Unilever (up 0.92%), and Sun Pharmaceutical Industries (up 0.62%).
• Top Losers: Adani Enterprises (down 4.83%), Bharat Petroleum Corporation (down 4.71%), Shriram Finance (down 4.70%), Mahindra & Mahindra (down 3.73%), and Larsen & Toubro (down 3.38%).

Broader Indices: Midcap and Small Cap

• Nifty MidCap 50 Gainers: Indian Hotels Company, Max Healthcare Institute, Sundaram Finance, Oracle Financial Services Software, and CG Power & Industrial Solutions.
• Nifty MidCap 50 Losers: Hindustan Petroleum Corporation, Dixon Technologies (India), Au Small Finance Bank, Vodafone Idea, and Steel Authority of India.
• Nifty Small Cap 100 Gainers: Jammu & Kashmir Bank, PNB Housing Finance, Cyient, Century Textiles & Industries, and City Union Bank.
• Nifty Small Cap 100 Losers: Mangalore Refinery & Petrochemicals, Hindustan Copper, R R Kabel, Finolex Cables, and Gujarat Narmada Valley Fertilisers & Chemicals.

In Q2FY25, several key stocks have caught the market’s attention due to their quarterly performance results, updates in management, strategic deals, and changes in financial metrics. From revenue growth to profit plunges, the latest updates provide a clear view of how several sectors, including energy, banking, manufacturing, and FMCG, are navigating economic challenges and opportunities. This detailed breakdown highlights the performance and strategic direction of top companies, helping investors understand the potential impacts on stock performance in the near term.

Hindustan Petroleum Corporation Ltd. (HPCL)

Hindustan Petroleum's net profit plummeted by 97.6% year-on-year (YoY) to ₹142.7 crore in Q2FY25, as higher raw material, inventory, excise duty, and finance costs weighed heavily on earnings. However, revenue increased by 5.6% YoY to ₹1.1 lakh crore, thanks to improved performance in the downstream petroleum segment. The stock features in a screener for stocks where mutual funds increased their shareholding, reflecting ongoing institutional interest in this sector.

Patanjali Foods

Patanjali Foods reported a 21.4% YoY growth in net profit to ₹309 crore in Q2FY25, driven by lower raw materials and finance costs. The edible oils segment contributed significantly to this growth, with revenue up by 4.5% YoY to ₹8,198.5 crore. Patanjali Foods now appears in a screener of stocks with rising net profit margins on a quarter-on-quarter (QoQ) and trailing twelve months (TTM) basis.

Finolex Industries

Finolex Industries saw a steep 58.5% YoY decline in net profit to ₹40.7 crore in Q2FY25, missing Forecaster estimates by 65.7%. This decline was attributed to volatility in PVC prices and an extended monsoon affecting business activity. Revenue decreased by 6.2% YoY to ₹828.4 crore, positioning the company in a screener for stocks with growing quarterly profits for the past two quarters, despite this quarter’s slump.

Axis Bank

The Reserve Bank of India (RBI) has approved the re-appointment of Amitabh Chaudhry as the Managing Director & CEO of Axis Bank for a three-year term, effective from January 1. Axis Bank shareholders had already approved his re-appointment during the 30th Annual General Meeting on July 26. This renewal of leadership signals stability in Axis Bank’s growth strategy and is expected to have a positive impact on its long-term performance.

Atul Ltd.

Atul Ltd. reported a 16.7% YoY growth in revenue to ₹1,392.8 crore in Q2FY25, driven by improvements in life science chemicals and performance & other chemicals segments. Net profit rose significantly by 51.5% YoY to ₹136.8 crore, marking the company’s inclusion in a screener of stocks with improving quarterly net profit and profit margins (QoQ).

Indian Energy Exchange (IEX)

IEX’s net profit increased by 25.3% YoY to ₹108.3 crore in Q2FY25, bolstered by an increase in industrialization and consumer demand. Revenue also saw a 26.2% YoY rise to ₹167.8 crore, positioning IEX in a screener of stocks with revenue growth over the past four quarters. This ongoing revenue increase is indicative of IEX’s expanding role in India’s energy sector.

Oracle Financial Services Software

Oracle Financial Services Software reported a 6.3% decline in net profit on a QoQ basis, bringing it to ₹577.7 crore in Q2FY25, with revenue also decreasing by 3.9% QoQ to ₹1,673.9 crore. The decline is attributed to lower sales in the product licenses and related activities segments. Nevertheless, the company remains in a screener where mutual funds have increased shareholding over the past month, showing continued confidence among institutional investors.

Reliance Jio and Other Telecom Updates

Reliance Jio reported a reduction of 40.2 lakh wireless subscribers on a net basis in August. Bharti Airtel and Vodafone Idea also reported net subscriber losses, with Bharti Airtel losing 24.1 lakh subscribers and Vodafone Idea losing 18.7 lakh subscribers. The ongoing subscriber losses highlight competitive pressures and challenges in the telecom sector.

Petronet LNG

Petronet LNG’s revenue saw a 3.9% YoY increase to ₹13,024.3 crore in Q2FY25, slightly missing Forecaster estimates by 1.6%. Net profit grew modestly by 1.4% YoY to ₹863.2 crore. Petronet LNG is listed in a screener for stocks experiencing revenue declines over the past two quarters, highlighting some volatility in its financial performance.

Larsen & Toubro

Larsen & Toubro (L&T) secured a ₹1,000-2,500 crore order from the ITER Organisation in France, involving the deployment of advanced technologies to assemble ports and components in a nuclear fusion project. This strategic contract underscores L&T’s expertise in high-stakes global projects and its ongoing leadership in engineering and construction.

Cyient Ltd.

Cyient reported 24.5% QoQ growth in net profit to ₹179.1 crore, with revenue up by 12% QoQ to ₹1,900.2 crore in Q2FY25, led by the digital, engineering & technology (DET) and design-led manufacturing (DLM) segments. The stock is featured in a screener of companies with increasing cash flows from operations, reflecting Cyient’s strong financial footing.

Insolation Energy

Insolation Energy’s subsidiary, Insolation Green Energy, received a ₹208.3 crore order from Zetwerk Manufacturing for 550 Wp solar PV modules to be supplied to NTPC’s Khavada site in Gujarat by the end of FY25. This order is expected to strengthen Insolation Energy’s market position in the renewable energy sector.

Radico Khaitan

Radico Khaitan's Prestige & Above (P&A) segment saw volumes increase by 12.6% to 3.2 million cases in Q2FY25. Net sales in the P&A segment rose by 18% to ₹578 crore, now contributing 75.7% of overall sales, up from 70%. However, total Indian Made Foreign Liquor (IMFL) volumes fell by 2.5% during the quarter.

PNB Housing Finance

PNB Housing Finance’s net profit rose 22.6% YoY to ₹469.7 crore in Q2FY25, supported by effective management of financial losses and write-offs. Revenue increased by 5.7% YoY to ₹1,878.7 crore, placing it in a screener of stocks with zero promoter pledge, appealing to risk-averse investors.

Adani Ports & Special Economic Zone

Adani Ports’ subsidiary, Adani Harbour International DMCC, acquired an 80% stake in Astro Offshore Group for $194.8 million (approx. ₹1,637.6 crore), expanding Adani Ports’ presence in offshore logistics and port operations.

DCB Bank

DCB Bank reported 22.6% YoY growth in net profit to ₹155.5 crore in Q2FY25, with revenue increasing by 20.1% YoY to ₹1,568.4 crore. The bank's asset quality improved, as gross and net non-performing assets (NPAs) contracted by 7 basis points (bps) and 11 bps YoY, respectively, highlighting effective risk management.

Key Takeaways from the Market Volatility

The Indian stock market’s broad-based decline highlights growing investor caution amid a challenging global environment. Despite the market's downturn in October, the Indian indices have managed to maintain their year-to-date gains. As FIIs continue to move funds out of India, the broader implications for market stability and growth potential remain uncertain. However, continued support for blue-chip stocks and the Nifty’s year-to-date performance underscore some resilience in the Indian market, hinting at opportunities for long-term investors amid the current volatility.

Conclusion

The sharp decline in Sensex and Nifty, along with substantial losses in midcap and small-cap indices, reveals a market sentiment impacted by global and domestic concerns. Investors are advised to monitor key economic indicators, foreign fund flows, and geopolitical developments closely, as these will likely influence the market’s direction in the near future. With significant uncertainties ahead, investors may continue to focus on quality stocks and defensive sectors as the market seeks stability in turbulent times.

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