The Indian stock market witnessed mixed performances on October 24, with the Sensex and Nifty largely hovering around the flatline. While FMCG and IT stocks dragged down the broader indices, financial and construction stocks offered some respite. The day saw several key gainers and losers, reflecting the volatility in specific sectors based on company earnings and broader market trends.

Gainers:

1. CARE Ratings hit the 20% upper circuit after reporting a 31% year-on-year growth in consolidated profit-after-tax for the September quarter. Its revenue from operations rose by 22% year-on-year, amounting to ₹117 crore. The robust financials buoyed investor confidence, pushing the stock price higher.

2. Tata Communications witnessed a strong rally following its announcement of integrating NVIDIA-accelerated computing into its AI Cloud infrastructure. The collaboration is expected to enhance Tata Communications' offering in the AI space, making it a leader in the cloud computing segment. The stock surged in response to this strategic move.

3. Piramal Pharma shares climbed 18% after the company reported a sharp rise in its net profit for the July-September quarter. The company’s net profit jumped 3.5 times year-on-year, reaching ₹22.59 crore compared to ₹5.02 crore in the previous year. This impressive performance lifted investor sentiment, leading to significant gains in the stock.

4. Sona BLW Precision rallied by 13% after delivering a solid earnings report for the second quarter. The auto components maker posted a 16% year-on-year increase in its profit-after-tax. Moreover, the announcement of a pact with Escorts Kubota to acquire its railway equipment division further boosted investor confidence, sending the stock soaring.

5. Aster DM Healthcare experienced a major surge, with its shares skyrocketing 14%. The company’s turnaround from a net loss of ₹31 crore in the previous fiscal year to a net profit of ₹97 crore in the September quarter led to the sharp rise in its stock price. This robust earnings performance underlined the strong recovery in the healthcare sector.

Losers:

1. KPIT Technologies saw a steep decline of 15% after JPMorgan revised its price target downwards to ₹1,900 per share. The tech company also revised its FY25 constant currency revenue growth outlook to the lower end of its guidance range due to delays in deal ramp-ups and closures. This led to a significant drop in the stock as investors reacted to the downward revision.

2. Dr. Lal PathLabs shares slipped by over 6%, despite the company reporting an 18% year-on-year increase in consolidated profit-after-tax. The decline was attributed to profit booking, as investors locked in gains following the positive results. The stock witnessed selling pressure, causing it to drop despite strong quarterly performance.

3. Hindustan Unilever (HUL) faced a 6% decline as the company’s volume growth came in below expectations. Consumption trends remained weak, especially in urban markets, where inflation has impacted consumer spending. The weaker-than-expected earnings, combined with concerns over the lack of margin expansion, caused the stock to tumble.

4. SBI Life Insurance shares dropped by over 5% after the company’s September quarter results missed market expectations. Key metrics like Annual Premium Equivalent (APE) and Value of New Business (VNB) were 11% and 14% below Street estimates, respectively. The weaker-than-expected performance weighed heavily on the stock.

5. Hindalco shares plummeted by nearly 7% following the 28% decline in the stock of Constellium SE, a Paris-based manufacturer in the same segment. Constellium's poor quarterly results raised concerns for Hindalco’s subsidiary Novelis, which operates in a similar market. The automotive sector, a key segment for both companies, has been facing demand challenges, raising fears of further downside risks for Hindalco.

Sectoral Performance:

The FMCG sector was among the worst performers on October 24, with heavyweights like HUL, Britannia, and Nestle India dragging down the broader indices. Weak consumption trends and disappointing quarterly earnings were the primary drivers behind the underperformance. HUL's management cited weak consumer demand as a key challenge, particularly in urban areas.

Meanwhile, the IT sector also faced headwinds, with KPIT Technologies leading the losses after revising its growth outlook downward. The broader IT sector saw limited gains as investors remained cautious about the future earnings outlook, especially given the global slowdown in tech spending.

In contrast, the financial sector performed relatively well, with public sector banks like SBI, Bank of Baroda, and PNB posting gains. The construction sector also showed strength, driven by positive earnings from companies like Sona BLW Precision and Aster DM Healthcare, which boosted market sentiment.

Expert Insights:

Market analysts believe that the FMCG sector may continue to face challenges in the coming months due to weak consumption trends and rising input costs. Inflationary pressures have impacted household budgets, particularly in urban areas, where consumers have been tightening their belts.

On the other hand, the financial sector remains a bright spot, with public sector banks continuing to deliver strong earnings growth. Banking stocks are expected to remain resilient in the near term, supported by healthy credit growth and improving asset quality.

Conclusion:

The October 24 session in the Indian stock market was a mixed bag, with gains in sectors like financials and construction offset by losses in FMCG and IT stocks. Companies like Piramal Pharma, Sona BLW Precision, and Aster DM Healthcare emerged as the day’s top gainers, while KPIT Technologies, Hindalco, and HUL led the list of losers.

Investors are advised to closely monitor company earnings reports in the coming weeks as they are likely to drive market sentiment. FMCG and IT sectors may continue to face pressure, while financials and construction stocks are expected to remain in focus due to their strong earnings outlook.

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