Indian stock markets experienced a turbulent session on Monday as the Nifty 50 and Sensex closed in the red, primarily driven by profit booking. The Nifty 50 index slipped by 0.45%, closing at 24,741, while the Sensex ended marginally lower by 0.05%, settling at 81,180. Despite opening with a positive sentiment, bolstered by a sharp rise in HDFC Bank, the market failed to maintain its momentum due to a sell-off in Kotak Mahindra Bank and Infosys, both of which pulled down the indices.

The session saw 36 out of the 50 Nifty stocks close in the red, with Tata Consumer Products leading the pack, registering a significant decline of 7%. Other notable losers included Kotak Mahindra Bank, Bajaj Finserv, BPCL, and IndusInd Bank, all of which fell by over 3%. Additionally, companies such as Trent, Adani Enterprises, Adani Ports & SEZ, Hindalco Industries, Britannia Industries, Cipla, Bajaj Finance, Bharat Electronics, UltraTech Cement, and Grasim Industries saw their share prices drop by more than 1.5%.

Midcap and Smallcap Stocks Bleed

While the benchmark indices experienced moderate losses, the broader market bore the brunt of investor exit strategies, with mid and smallcap stocks witnessing significant selling pressure. The Nifty Midcap 100 index plunged by 1.73%, closing at 57,634 points, and the Nifty Smallcap 100 index shed 1.63% to close at 18,766 points.

The Q2 FY25 earnings season has provided little optimism so far, with weak trends across sectors. Investor sentiment has been hurt, especially as many stocks are trading at elevated valuations, requiring solid performances to justify these levels. The generally subdued performance in earnings has exacerbated the market's downturn.

Sectoral Performance

Among sectoral indices, the Nifty Auto Index stood out, posting a gain of 0.34%, marking its second consecutive day of gains. The upward momentum in Bajaj Auto and Mahindra & Mahindra shares significantly contributed to the index's performance. Bajaj Auto surged 4.3% after its CEO, Rajiv Bajaj, expressed optimism about the company’s growth trajectory, projecting double-digit growth by December.

All other major sectoral indices closed in the negative territory. The Nifty Media index saw a steep decline of 2.6%, while the Nifty Metal, Nifty Oil & Gas, Nifty FMCG, Nifty Realty, and Nifty IT indices all suffered losses of over 1%. The weak performance in these sectors contributed to the broader market's downward trajectory.

Stock-Specific News

Mangalore Refinery And Petrochemicals reported a net loss of Rs 696.9 crore in Q2FY25 compared to a profit of Rs 1,051.7 crore in Q2FY24 due to higher raw material costs and lower inventory sales. Revenue increased 26% YoY to Rs 28,785.9 crore. The stock is underperforming in the past quarter.

L&T Finance's Q2FY25 net profit rose 16.9% YoY to Rs 695.6 crore, with a 25.1% YoY increase in revenue to Rs 4,019 crore, driven by higher interest and fee incomes. Its book value per share improved over the past two years.

Jio Financial Services' Q2FY25 net profit grew by 3.1% YoY to Rs 689.1 crore, with revenue increasing by 14.1% YoY to Rs 693.5 crore, aided by higher interest and dividend income. Mutual funds have increased shareholding in the company in the past quarter.

RBL Bank hit a 52-week low of Rs 175.5 per share as its Q2FY25 net profit dropped by 24.3% YoY to Rs 222.5 crore due to tax expenses, while revenue rose by 20.1% YoY to Rs 4,458.3 crore. The stock has high interest payments relative to earnings.

TD Power Systems gained after signing a five-year contract to supply traction motors for Europe. The initial order of Rs 18 crore will be delivered in April 2025, with the total contract expected to reach Rs 300 crore.

Rajiv Bajaj, CEO of Bajaj Auto, anticipates near double-digit growth by December, with the 125cc+ segment growing 40% higher than the industry. He expects a volume of 45 lakh by year-end, and 47 lakh in FY25, boosted by exports.

Axis Direct reaffirmed its 'Buy' rating on Nestle India with a target price of Rs 2,640, projecting a 12% upside. It sees long-term growth from rural penetration, new products, and premiumisation, with revenue expected to grow at a 10.7% CAGR from FY25-27.

Tata Consumer Products fell after its Q2FY25 revenue missed estimates by 2.4%, though revenue grew 11.4% YoY to Rs 4,260.4 crore. Net profit rose 7.7% YoY to Rs 364.4 crore, but the stock shows weakening technicals.

Refex Renewables & Infrastructure surged after its subsidiary secured a Rs 480 crore order from NTPC for a 100 MW solar project.

JSW Steel and JFE Steel Corp's JV, JSquare Electrical Steel Nashik, agreed to acquire Thyssenkrupp Electrical Steel India for Rs 4,051.4 crore.

IndiaMART InterMESH's Q2FY25 net profit rose 18% QoQ to Rs 135.1 crore, with revenue up 7.5% QoQ to Rs 413.2 crore. The stock has shown consistent revenue growth for eight consecutive quarters.

ICICI Lombard General Insurance's Q2FY25 net profit grew by 20.2% YoY to Rs 694 crore, with a 17.1% YoY revenue increase to Rs 6,147.3 crore. The stock has shown revenue growth for the last three quarters.

Sunil D’Souza, MD & CEO of Tata Consumer Products, expects stronger Q3FY25 volumes and a YoY EBITDA margin improvement of 50-100 bps, driven by improved rural demand.

Godrej Properties acquired 3 acres in Ahmedabad for a premium residential project with an estimated booking value of Rs 1,300 crore.

Kotak Mahindra Bank’s Q2FY25 net profit grew 4.8% YoY to Rs 3,343.7 crore, but missed estimates by 1.9%. Revenue increased 17.7% YoY to Rs 15,900.5 crore, while gross NPAs improved and net NPAs expanded slightly.

Netweb Technologies India's Q2FY25 net profit surged 66.5% QoQ to Rs 25.7 crore, with revenue up 68.1% QoQ to Rs 251.1 crore. Mutual funds increased shareholding in the company last quarter.

Hitesh Doshi, CMD of Waaree Energies, outlined plans to boost capacity from 13 GW to 21 GW using IPO funds, with a 5.4 GW cell manufacturing facility set to launch in FY25.

PNC Infratech fell 20% after being disqualified from Ministry of Road Transport & Highways tenders for one year.

HDFC Bank’s Q2FY25 net profit rose 5.3% YoY to Rs 16,821 crore, with revenue growing 9% YoY to Rs 85,499.6 crore. However, its gross and net NPAs increased slightly. The stock is near its 52-week high with strong volumes.

Garden Reach Shipbuilders & Engineers secured a Rs 491 crore contract for an Acoustic Research Ship from the DRDO.

Tech Mahindra hit a 52-week high of Rs 1,745 per share, with Q2FY25 net profit up 46.8% QoQ to Rs 1,250.1 crore. Revenue increased 5.2% QoQ to Rs 13,834.7 crore, with improvements in IT and business process services. Provisions decreased.

Outlook and Conclusion

The Indian stock market's performance on Monday was marked by significant volatility, driven by profit booking in heavyweights like Infosys and Kotak Mahindra Bank, alongside strong buying in HDFC Bank. The Nifty Midcap 100 and Nifty Smallcap 100 indices' sharp declines signal investor caution amid high valuations and a less-than-stellar earnings season. Despite this, select stocks in sectors like auto and renewables showed resilience, offering opportunities for investors seeking growth stories.

With Q2 FY25 earnings playing a critical role in shaping market sentiment, investors will likely continue focusing on corporate performance and global economic conditions in the upcoming sessions.

The current active IPO is Waaree Energies Limited IPO, Deepak Builders & Engineers India Limited IPO, Premium Plast Limited IPO.

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