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    The Baseline

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    The Baseline
    09 Oct 2026
    Pre Monday: Early in the results season, good signs and tears

    Pre Monday: Early in the results season, good signs and tears

    Even if we are irresistible reading, I hope this screen is not the first thing you are looking at on a weekend morning. Look outside instead, talk to some people, have a great cup of coffee (or, even if I don't get the appeal, tea).

    With results season starting, this is my top question: Are Indian stocks going to catch a break with an earnings bump, that will make valuations more attractive? There are some early hints.

    1. Tears in some corners, as the UPI merchant fee faces delays

    Remember the exciting news about the 0.4% merchant fee on UPI transactions above Rs. 2,000? The government is now considering delaying its October 15 implementation till January. Retailer opposition, and concerns about disruptions during the festive season are apparently behind the cold feet.

    Nothing has been announced, but Paytm and Pine Labs fell sharply after reports of the possible delay.

    The market cue: The longer the delay in NPCI's final decision, the further out analysts will have to push projected earnings improvements for these payment platforms. Fintech is discovering that a newly approved revenue model can come with a very flexible start date - especially if the business is mass-market.

    2. TCS may have cut worries about AI with its results

    For months, India's IT industry has worried that AI will replace its billable hours faster than it creates new business. TCS may have changed the argument a bit with its September quarter results. Its annualised AI revenue reached $3.1 billion, nearly 20% higher QoQ. Operating margins held steady at 24% even with the company increasing its AI investments. On Friday, TCS jumped over 3%, lifting the broader IT index.

    Morningstar sees a credible path to scaling AI revenue further, although it remains cautious about weak client spending. 

    The market cue: Watch Infosys, HCL Tech and mid-sized IT companies for evidence that AI contracts are turning into revenue without, critically, destroying margins. If TCS isn't an exception, beaten-down tech valuations could sway some investors.

    3. Counting the customers at jewellery companies

    Titan’s provisional update provides us with a useful earnings season hint. Domestic jewellery sales grew 21%, but buyer growth was only in the mid-single digits. Average bill size rose by double digits. Studded jewellery grew faster than plain gold.

    Nomura remains positive, but warns that tougher competition and a fading boost from higher gold prices could make future sales growth less impressive. It still expects FY27 profit growth to outpace revenue growth.

    The market cue: As more Q2 updates arrive, investors should separate real customer growth from pricing and product mix. For jewellers, real buyer numbers and studded-jewellery sales are worth close attention, beyond the pure revenue number.

    4. Not everyone is upset about the RBI rate hike

    Jefferies expects September quarter profits at major NBFCs to rise 34%, betting on Bajaj Housing Finance and Aditya Birla Capital.  Jefferies also thinks that these NBFCs, that lend more with floating rates while borrowing on fixed rates, will see a positive impact in the coming quarters from the RBI rate hike, as their lending revenue increases more than their funding costs.

    The market cue: Watch the current gap between lending revenue and borrowing costs for these NBFCs in their results, to assess how rate hikes are likely to pan out for these players.

    Heard on the street this week

    On Friday on X, Musk suggested that Ambani was obstructing Starlink's India launch, referring to Ambani as "the real boss of India". The telecom minister has pushed back saying that India did not allow monopolies.

    Starlink already has an operating licence for India, but needs security compliance and spectrum assignment before its commercial launch. It might be useful for everyone to watch those approvals and actual spectrum pricing, rather than the temperature on X.

    An ITC sale that is really about Adani? On 8 October, a GQG-linked fund sold about 36.5 crore shares of ITC, roughly 2.9% stake for Rs 9,395 crore. ITC had already fallen about 30% in 2026 and hit a multi year low that day.

    What is now only gossip: A BW Businessworld piece, quoting traders and one senior fund manager, says that Singapore-linked hedge funds are treating the ITC sale as a signal that GQG is raising cash, and will have to sell its large Adani holdings next.

    Disclaimer: This newsletter is for informational purposes and should not be construed as financial advice. Please consult your financial advisor before making any investment decisions.

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    The Baseline
    09 Oct 2026
    Five Interesting Stocks Today - October 9, 2026

    Five Interesting Stocks Today - October 9, 2026

    By Trendlyne Analysis

    1. FSN E-Commerce Ventures (Nykaa):

    This cosmetics retailer rose 4.5% on October 5 following an upbeat Q2FY27 business update. The company expects revenue to grow in the high-20% range YoY, even as festive demand shifted into Q3. Steady beauty sales and a sharp fashion rebound power this growth. Trendlyne Forecaster projects a 28.7% revenue rise and expects net profit to triple.

    Beauty remains Nykaa’s biggest moneymaker. The company expects revenue to grow in the high-20s as it wins new customers and opens more physical stores. Nykaa added 14 stores this quarter, bringing the total to 338. Meanwhile, existing stores posted their fastest sales growth in six quarters. Management aims to push the beauty network beyond 600 locations by FY30.

    Fashion is growing even faster. Nykaa expects segment revenue to jump into the low-40% range after widening its catalogue. The platform added 250 brands this quarter to attract new buyers. Abhijeet Dabas, CEO of Nykaa Fashion, said, “We are seeing a higher share of revenue come from repeat customers.” Stronger customer loyalty lowered acquisition costs, helping the fashion segment turn profitable. However, competition is rising from fast-fashion brands like NEWME, which launches over 500 styles weekly and plans to expand to 50 stores by the end of 2026.

    By FY30, Nykaa aims to grow revenue up to three times and EBITDA up to five times. It also targets a threefold jump in fashion sales alongside high single-digit margins. HDFC Securities calls these FY30 targets aggressive, especially for fashion. The brokerage warns that Nykaa will struggle to slash marketing and fulfilment expenses without hurting customer growth.

    Following the business update, Morgan Stanley kept an ‘Overweight’ rating with a target price of Rs 356, implying a 3.8% upside. It noted that both overall and beauty sales growth outpaced the bank's 26% and 25% forecasts. Fashion delivered the biggest surprise, beating the expected 35% growth. Analysts anticipate even stronger Q3 results as delayed festive demand hits the books.

    2. Honasa Consumer:

    This personal products company rose 9.5% in the past week after reporting a positive update ahead of its upcoming quarterly results.

    Honasa Consumer expects Q2FY27 net sales value YoY growth to be in the early 30s, with Mamaearth growing in the high teens and younger brands in the mid-40s. It also expects an early double-digit operating margin. Forecaster, meanwhile, expects net profit to jump nearly 69%.

    The update addresses two concerns ICICI Securities had flagged following Q1 earnings: whether Mamaearth could sustain growth and if Honasa could build sizeable brands beyond it. The brokerage reiterated its “Buy” rating in August and raised the target price to Rs 720, implying an upside of 54%. It pointed to The Derma Co crossing Rs 1,000 crore in annualised sales and younger brands growing faster than Mamaearth, noting that growth was spreading across the portfolio.

    HDFC Securities also counts Honasa among its preferred consumer stocks, expecting earnings to grow faster than most of the sector as margins improve. It sees wider physical-store reach helping drive the next phase of growth across the company’s brands.

    Offline channels already contribute about 35% of Honasa’s sales and more than half of Mamaearth’s, while the company directly reaches around 1,20,000 stores. It plans to increase this to about 3,00,000 by FY31. But HDFC notes that adding stores alone is not enough; sales from existing outlets also need to rise.

    The brokerage found that retailers typically earn a 15-23% margin on Honasa products, with promotional schemes taking this to 27-35%. Those incentives can boost sales, but the extra payouts can eat into profit.

    ICICI Securities also cited rising competition in the company’s core categories as a risk, which include face washes, shampoos and sunscreen. However, Honasa said it gained about 3.5 percentage points of market share in face washes and 1.6 points in shampoos in Q1, indicating that competitive pressure has not stopped it from gaining share.

    Even so, management expects margins to improve as newer brands become more profitable. EBITDA margin stood at 12.5% in Q1. Alagh said, “We will expand EBITDA margin by 100-150 basis points each year,” with a target of reaching 15% in five years.

    3. Sterlite Technologies (STL): 

    This optical and digital connectivity stock surged 11.7% over four sessions starting October 1, reaching an all-time high of Rs 1,051.1. The rally came after STL secured a $1.2 billion order from a hyperscale partner to supply optical connectivity products through 2030. Optical networking contributes to over 95% of the company’s total revenue.

    The momentum continued as Nomura initiated coverage with a ‘Buy’ rating and a target price of Rs 1,350, implying a 33% upside. The brokerage expects heavy data centre spending and tight industry supplies to drive long-term demand. A lack of factories outside China, which reduces supply diversification, combined with raw material bottlenecks and limited glass preform capacity, has created a persistent global supply deficit. To secure materials, hyperscalers are signing multi-year agreements, creating major opportunities for companies like STL.

    Nomura notes that STL’s end-to-end manufacturing capabilities will help it capture market share while rivals struggle with supply bottlenecks. Analysts estimate high-margin data centre revenue will jump from just 1% of total sales in FY26 to roughly 40% by FY29. 

    Discussing the growth outlook, CFO Ajay Janjari said, “We are targeting revenue to grow over 4x from Rs 4,750 crore in FY26 to Rs 20,000 crore in FY29, with EBITDA margin expanding 13.8 percentage points to over 27%.” An order book exceeding $2 billion fuels this expected surge in the core optical fibre business. STL plans to sell more high-value, integrated connectivity solutions. This shift will improve factory utilisation and enrich the product mix, further boosting margins.

    The global boom in AI and data centres is driving demand for optical fibre and connectivity solutions, expanding opportunities for STL. The company aims to invest Rs 1,000 crore annually over the next three years to expand its preformed fibre and cable capacities by 50%. This will scale capacity in line with demand from telecom, AI data centres and other optical connectivity applications.

    4. JSW Infrastructure:

    This marine ports and services company’s stock fell 5.7% on October 8 after HSBC downgraded it to ‘Reduce’ and set a target price of Rs 310. Although the stock has rallied 27% year-to-date, HSBC warned that the company's aggressive, capex-led expansion strategy carries elevated execution risks and could dilute its return on invested capital (ROIC).

    While HSBC expects strong cargo volumes in India to cushion disruptions at the company's Fujairah facility, it cautioned that slower project execution will likely weigh on earnings. Consequently, the brokerage trimmed JSW Infra's EBITDA estimates by 4% to 7% for FY27 through FY29. Highlighting a clearer growth trajectory, HSBC signalled a preference for peer Adani Ports, pointing to its superior ROIC and attractive valuation.

    Despite HSBC's cautious stance, broader market sentiment around JSW Infrastructure remains strong, with Trendlyne Forecaster showing 14 out of 17 tracking analysts holding a ‘Buy’ rating. The Forecaster expects JSW Infra’s Q2FY27 net profit to grow by 15.5% YoY, supported by port capacity expansion and logistics growth. 

    Operational headwinds stem primarily from its Fujairah Liquid Terminal in the Middle East, where an oil tank was damaged in a March drone strike by Iran. Although operations have been fully restored, repeated escalations in early 2026 highlight ongoing geopolitical risk in the strategic hub. Management factored Fujairah's impact into a revised FY27 volume growth target of 4.4% to 127 MTPA, while firmly maintaining its EBITDA targets of Rs 3,000 crore for FY27 and Rs 5,000 crore for FY28.

    5. Bajaj Finance:

    This non-banking financial company surged 2.3% on October 5 after reporting its Q2FY27 business update, with assets under management (AUM) growing 26.5% YoY to Rs 5.9 lakh crore, the fastest pace in seven quarters. The stock also drew attention after the company announced a Rs 17,500 crore fundraise through a qualified institutional placement (QIP) and promoter warrants. Jefferies retained its ‘Buy’ rating with a target price of Rs 1,280, implying about 33% upside, and named Bajaj Finance among its top picks.

    Bajaj Finance’s new loan bookings for the quarter rose 11%, compared with 26% a year earlier. The company says the figures are not directly comparable because the festive season began earlier last year.

    The current opportunity lies in growing across multiple lending categories while deepening relationships with its large customer base. The company has been expanding its gold-loan and microfinance networks alongside digital lending channels. Vice Chairman and Managing Director Rajeev Jain said, “The company is targeting Rs 10 lakh crore of AUM by 2029, while aiming to maintain its profitability metrics as the balance sheet scales.”

    The proposed capital raise could support the next phase of growth. Bajaj Finance plans to raise up to Rs 11,700 crore through a QIP and Rs 5,800 crore through warrants issued to promoter Bajaj Finserv. This would be its first equity fundraise since 2023.

    Jefferies expects AUM growth to remain around 23% annually through FY29 and sees earnings growth of 35% in FY27, followed by 22% in each of the next two years. The key risk is that the expansion will require more capital at a time when funding conditions could become less favourable. The RBI raised the repo rate by 25 basis points to 5.5% on October 7, its first hike in nearly four years, while Bajaj Finance has also raised its fixed-deposit rates by 15-40 basis points. Higher funding costs could pressure margins even as loan growth remains strong.

    Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

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    The Nifty 50 has corrected from its August peak, but smallcap and midcap stocks are holding up. What is driving this?

    Sept. 8, 2026

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    The Baseline
    08 Oct 2026

    From power equipment to platforms: Where analysts see the strongest Q2FY27 revenue growth

    By Anagh Keremutt

    The expected rate hike is here. The RBI has raised its benchmark rate by 25 basis points to 5.50%, its first increase in nearly four years, as higher oil prices add to inflationary pressures.

    The rate hike is likely to raise borrowing costs for companies, while expensive oil could add to input costs. But analysts still see opportunities in select industries. Feroze Azeez, Joint CEO at Anand Rathi Wealth, said, “Margins in capital goods, infrastructure and manufacturing are likely to remain stable, supported by healthy order books, capacity utilisation and operating leverage.” He added that earnings growth in banking and finance companies would be driven by strong loan growth rather than by margin expansion.

    Power and defence orders are supporting manufacturers. IT companies are gaining from AI spending and new software deals, while online platforms are seeing higher order values. Hospitals are expanding capacity, while US healthcare providers are outsourcing more administrative work to companies such as Inventurus.

    Analysts also see healthy revenue growth across realty, auto, jewellery and lending.

    In this edition of Chart of the Week, we look at the companies with the strongest Q2FY27 revenue growth (YoY) forecasts, alongside expected EPS growth.

    Power and manufacturing dominate the list

    The strongest Q2 revenue growth forecasts are concentrated in power and manufacturing sectors. Electrical equipment, wires and cables, electronics, steel and other industrial companies make up much of the list.

    Unmesh Sharma, Head of Institutional Equities at HDFC Securities, is positive on power equipment manufacturers. He points to years of spending on new power projects and factories keeping demand strong. “A global shortage of complex power equipment is also helping Indian manufacturers win orders and maintain pricing power,” he adds.

    Hitachi Energy’s revenue growth estimate stands at nearly 50% as it starts delivering on a Rs 32,222 crore order book. Execution on large power-transmission projects is picking up, with work on Khavda-Nagpur gathering pace and Bhadla-Fatehpur starting to add sales.

    Schneider Electric Infrastructure and R R Kabel also have revenue growth forecasts above 30%. Power projects and data centres are bringing orders to Schneider, while domestic cable demand and recovering exports support R R Kabel.

    Defence and aircraft orders are bringing in more business too. PTC Industries has a 75% revenue growth estimate, helped by growth at Aerolloy, its subsidiary that makes specialised metals and aircraft parts. Aerolloy accounted for about 38% of the group’s total income in Q1, when its income rose more than fivefold.

    Among the broader manufacturers, APL Apollo’s steel-tube sales hit a quarterly record in Q2, rising 13% from a year earlier. Analysts expect revenue to grow 33%.

    PG Electroplast’s revenue is forecast to rise 37%, helped by growing washing-machine sales and new capacity. Management says customers have committed to buying more washing machines. EPS could more than triple against a weak base: profit plunged 88% in Q2FY26 as poor air-conditioner sales, higher depreciation and currency losses hit earnings.

    Analysts also see strong growth outside manufacturing, particularly in IT services and online platforms.

    Technology growth comes from newer pockets

    AI investment is creating demand for companies that build powerful computers. Software companies are picking up new projects, while busier shopping platforms can earn more from systems they already run.

    Netweb tops the list with a revenue growth forecast of 180%, as cloud providers and companies buy more of the powerful computers it designs and builds. AI systems already generated about 62% of its Q1 revenue. Its EPS growth estimate stands at 142%.

    Coforge’s 59% revenue forecast reflects the impact of Encora, which it acquired in April. The unit accounted for 17% of Q1 sales despite being included for only two months. Coforge is also getting revenue from a $158 million deal that started contributing in April.

    Internet retail and platform companies are turning higher sales into stronger profits. For example, Eternal has a 73% revenue growth estimate, helped by Blinkit’s store expansion and festive demand. Motilal Oswal expects Blinkit’s order value to grow about 23% from Q1. Analysts expect EPS to more than triple as Blinkit becomes more profitable and food-delivery earnings improve.

    Analysts see strong growth across both beauty and fashion at Nykaa. Its latest update points to revenue growth in the high twenties, in line with analysts’ 29% estimate. Fashion is growing faster, with revenue growth estimated in the low forties. Analysts expect EPS to more than triple.

    Healthcare providers expand their reach and services

    Hospitals are adding capacity in India, while acquisitions and US outsourcing are driving growth for healthcare services companies. Kotak Institutional Equities sees hospital profits improving as newer hospitals fill more beds, while diagnostics growth remains supported by steady demand and better pricing.

    KIMS has a revenue growth estimate of 30%, helped by its expanded Kondapur hospital and growing patient numbers at newer hospitals. Kondapur brought in Rs 45 crore in July, its first full month after expansion, against an earlier monthly level of about Rs 33 crore.

    Narayana Hrudayalaya’s 74% revenue forecast includes UK sales that were absent a year earlier. The UK business accounted for about 31% of Q1 revenue. In India, neighbourhood clinics are bringing more patients into its hospitals, while complex cardiac and robotic procedures help raise income per patient.

    Inventurus Knowledge Solutions’ revenue is estimated to double, with its July acquisition of TruBridge adding substantially to the business. TruBridge represents roughly 44% of the two companies’ combined annual revenue. Demand is growing in the existing business too, as US healthcare providers outsource more administrative work.

    Company-specific drivers add to growth

    The remaining companies do not fit one common theme. Their growth comes from project completions, consumer demand or larger lending businesses.

    In realty, Godrej Properties’ revenue is forecast to more than double as it completes more projects and records sales from homes booked earlier. The company is targeting 13.5 million square feet of completions this year, about 11.5% more than FY26.

    Adani Enterprises’ revenue is expected to rise 37%, helped by higher copper production and a growing airport business. Navi Mumbai airport began international operations in July, adding another source of passenger revenue. Analysts see EPS surging nearly 270%.

    Maruti’s 29% revenue growth forecast reflects demand for higher-priced SUVs, with utility-vehicle sales jumping 62% in September.

    Thangamayil Jewellery’s revenue is expected to surge 57%, helped by festive shopping. Sales during its three-day Aadi Perukku period in August more than doubled from a year earlier.

    Gold lending supports Manappuram’s 33% revenue growth forecast as it gives out more gold loans and earns more interest income. EPS could nearly triple as subsidiary Asirvad Microfinance returns to profit.

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    The Baseline
    07 Oct 2026
    The great puzzle: India is growing but global money is leaving

    The great puzzle: India is growing but global money is leaving

    There is something a bit frustrating about the India story right now. The economy grew 7.8% in the latest quarter, and Nifty 50 companies saw profit growth of 18%, the strongest in ten quarters. Domestic investors continue to pour over Rs 32,000 crore a month into SIPs.

    But foreign investors have sold roughly $29 billion of Indian equities this year.

    If growth is strong and corporate profits are improving, foreign money should be arriving rather than leaving. The instinctive explanations are very familiar: Indian stocks are expensive, oil is high, the rupee is weak, etc etc.

    All these arguments still feel unconvincing. India has not suddenly become a poor investment destination. But there may be a different, broader reason: that the choices available for the global investor have changed, and India is stuck between hotter options. 

    An emerging market fund manager - the kind of person who is typically a former grade A student, obsessed with their year end bonus, who stays up late night looking at numbers - is constantly checking whether India is a better place for their next dollar compared to Taiwan, Korea, China, US bonds or a dozen other choices.

    And on that test, the case for India has become less straightforward.

    Let's dive in. 


    The economy is doing better than the "narrative" around it

    The latest domestic numbers point to a sunny economy, as April-June GDP growth came in at 7.8%. The problem is that foreign investors do not receive their returns in GDP points, but in dollars. And the rupee has fallen roughly 6.5%-7% against the dollar this year, enough to eat into equity gains.

    Indian importers seem unconvinced that the currency weakness is going to disappear soon: they booked a record $77 billion of currency hedges in September alone. Through September, importer hedging stood at $576.6 billion, compared with $305.6 billion for exporters.

    India is facing some cooler competitors

    The second change is happening inside global benchmarks.

    The MSCI Emerging Markets Index is not the broad basket of developing economies people picture when they think “emerging markets”. Tiny Taiwan, which is just 144 kilometres wide, makes up nearly 30% of the index. South Korea constitutes 21.4%, China 19.8% and India 10.7% (as of September end). The semiconductors and AI infrastructure boom has boosted Taiwan and South Korea to the extent that some of their companies have a higher weight in the index than India.

    India therefore finds itself competing with a story that is, let us admit, pretty cool, and easier to sell: not long-term demographic potential but enormous earnings growth, new tech, and the buzzwords of AI and semiconductor hardware.

    The competition is making the India story less fashionable. We are the guy in the collar t-shirt and chinos.

    Ok, the point of "high valuations" is still kind of true

    This is the common global investor complaint. And I am reluctant to admit that they are still right. Even after the recent declines, MSCI India is still trading on a forward P/E of 18.61X. MSCI Taiwan is at 18.65, MSCI Korea at 4.95 and MSCI Emerging Markets at 9.72.

    So Taiwan is available at almost the same multiple while offering direct exposure to the semiconductor cycle. Korea is dramatically cheaper, although also much more cyclical.

    So are foreign investors getting it wrong about India?

    The rupee is weak, oil is expensive, US bond yields are high. A global allocator trimming India under those conditions is not behaving irrationally.

    But while India saw roughly $48 billion of foreign equity outflows over an 18-month period earlier this year, it did not suffer anything like the market damage such an exodus would once have caused, thanks to domestic inflows acting like a shock absorber. August SIP contributions hit a record Rs 32,297 crore, while equity mutual funds have now seen net inflows for 66 consecutive months.

    Indian companies, meanwhile, raised a record Rs 2.43 lakh crore from equity markets in the first half of FY27.

    India has spent years worrying about its dependence on foreign capital. Now the domestic investor base is becoming large enough to dilute that dependence. Foreign money still matters, of course. $29 billion leaving the country is not a rounding error. But the market's ability to absorb it suggests that India is becoming less important in global portfolios at the same time global portfolio flows are becoming less important to India.

    Our long term case (a large domestic market, strong growth, deepening financialisation, rising household equity participation and improving corporate earnings) is intact and offers a bouquet of strengths few countries have.

    What needs to change is a currency under pressure, and the hottest trades of semiconductors and AI, happening elsewhere. It will take time for us to become the cool kid again.

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    The Baseline
    06 Oct 2026
    Five stocks to buy from analysts this week - October 6, 2026

    Five stocks to buy from analysts this week - October 6, 2026

    By Ruchir Sankhla

    1. Ethos:

    Axis Direct maintains its ‘Buy’ rating on this luxury watch retailer, with a target price of Rs 3,360, an upside of 28.2%. Analysts Suhanee Shome and Urmi Shah are positive on Ethos as it opens new stores, widens price points, and scales its in-house brand, Favre Leuba. Management sees substantial headroom in India’s luxury market and aims to expand revenue tenfold over the next decade.

    Ethos plans to triple its boutique count to 300 over the next five to six years. It is rolling out tailored formats for distinct customer segments: ‘Hour Studio’ targets watches priced between Rs 25,000 and Rs 2 lakh, while ‘Ethos Haute Horology’ caters to ultra-luxury pieces above Rs 50 lakh. The firm also plans to produce 8,000 Favre Leuba watches this year and double capacity within two years.

    Shome and Shah note that earlier challenges around hiring trained staff and finding suitable premium locations have eased. They anticipate new store rollouts, same-store sales growth, pre-owned watches, and luxury accessories to drive performance. Analysts forecast revenue to climb 31.8% annually and net profit to surge 72.2% annually through FY29.

    2. Healthcare Global Enterprises (HCG):

    Prabhudas Lilladher maintains its ‘Buy’ rating on this hospital chain, with a target price of Rs 820, an upside of 20.5%. Analysts Param Desai and Sanketa Kohale remain confident in HCG as patient footfalls rise and bed capacity expands. Management targets mid-teens revenue growth, alongside a 3–5% annual increase in revenue per patient.

    HCG will invest around Rs 550 crore to add 900 beds by FY30, expanding existing hospitals by 550 beds and adding 350 beds through new facilities. The company is pursuing expansion across Mumbai, Ahmedabad, Coimbatore, and Punjab. It also plans to acquire 120–150-bed hospitals in underserved cancer-care regions. Management estimates EBITDA margins to climb from 18.3% in FY26 to over 20% within three years. North Bengaluru hospital turning profitable, lower purchasing costs and more efficient spending on sales and marketing will drive margins higher.

    Desai and Kohale expect higher bed occupancy, lower procurement costs, and an increasing share of insurance and cash-paying patients to boost profitability. Investment backing from KKR will further sharpen operational efficiency. Analysts forecast operating profit to grow 24% annually over FY27–28, up from 19% during FY24–26.

    3. Shriram Finance: 

    Motilal Oswal retains its ‘Buy’ rating on this non-banking lender with a target price of Rs 1,220, implying an upside of 26.4%. Analysts Abhijit Tibrewal and Nitin Aggarwal expect earnings to improve as Shriram Finance expands beyond its traditional commercial vehicle-finance business, lowers borrowing costs and uses its large branch network more efficiently.

    MUFG Bank’s purchase of a 20% stake gives Shriram Finance healthy capital to fund growth over the next four to five years. Lower funding costs enable it to expand into new vehicle financing, helping existing borrowers move from used to new vehicles. The relationship with MUFG could create potential partnerships with Japanese giants such as Toyota, Denso and Honda, which should generate opportunities in areas such as equipment leasing, rural lending and financing for small businesses.

    Management wants vehicle loans, small-business loans and gold loans to each contribute around 20% of total loans over the next three years. Shriram Finance can also use its large customer base to offer more products to existing borrowers as their financing needs change. Tibrewal and Aggarwal believe this should improve customer retention and help the company expand into a broader retail lender rather than remain focused mainly on commercial vehicles.

    4. Cyient DLM: 

    ICICI Direct maintains its ‘Buy’ rating on this electronics manufacturing services company, with a target price of Rs 1,100, an upside of 17.2%. Analysts Jaymin Trivedi and Kirankumar Choudhary favour the stock as the company expands into semiconductor equipment, AI data centres, and robotics. Surging investments in India's chip ecosystem and rising AI infrastructure spending boost demand for its data-centre electronics. In robotics, the firm plans to build high-reliability components and testing systems.

    Management targets up to 30% annual revenue growth over the medium term, backed by a strong order pipeline. In Q1FY27, its order book hit Rs 2,599 crore, over double its FY26 revenue. The company has also identified a $1 billion pipeline of design orders through FY34. Higher production volumes and premium products should lift EBITDA margins from ~10% to around 12% across FY27–29.

    Trivedi and Choudhary expect steady order wins, faster project execution, and new business lines to power future earnings. They project revenue to grow at a 27.9% CAGR over FY27–28, with operating profit and net profit jumping 40% and 41% annually.

    5. HDFC Bank: 

    ICICI Securities maintains its ‘Buy’ rating on this private-sector bank, with a target price of Rs 920, an upside of 29.3%. Analysts Jai Prakash Mundhra and Amansingh Sahajsinghani believe Anup Bagchi’s appointment as MD & CEO clears leadership uncertainty and offers an opportunity for a fresh strategic direction.

    The bank’s leadership aims to prioritise cutting funding costs, reviving low-cost CASA deposit growth, and boosting returns across its extensive branch network. Analysts add that management must also strengthen technology infrastructure and internal governance. Bagchi’s broad financial services background will help HDFC Bank cross-sell products and attract deposits across group companies.

    HDFC Bank has already expanded its deposits market share from 9.5% in FY22 to 11.8% in FY26. Mundhra and Sahajsinghani project advances and deposits to grow 13.2% and 15.8% annually over FY27–28. Over the same period, they expect return on equity (RoE) to rise from 13.8% to 14.5% and net interest margins to improve from 3.3% to 3.5%.

    Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

    (You can find all analyst picks here)

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    The Baseline
    02 Oct 2026
    Pre Monday: The Nifty's downward trend has broken a 25 year record

    Pre Monday: The Nifty's downward trend has broken a 25 year record

    Market cues for next week

    The Nifty has just fallen for eight consecutive weeks. That is its longest weekly losing streak in 25 years. This week alone, the Nifty dropped nearly 3%, and across the eight weeks, it is down 8.7%. Foreign investors have now pulled out a record $27.8 billion from Indian equities this year.

    We track what is shaping the markets in the coming week.

    Let's dive in.

    1.  With the new CEO, HDFC Bank makes a very un-HDFC move

    HDFC Bank has appointed Anup Bagchi as CEO. He is the first outsider ever to run India's largest private-sector lender.

    Markets were pleased. This was announced on Friday after Indian markets closed, but HDFC's US-listed shares jumped nearly 5% after the announcement.

    Bagchi inherits a bank whose post-merger performance has greatly disappointed investors. Q1 profit growth slowed to 5%, while net interest margin fell to 3.2%, versus 4.3% at ICICI Bank.

    The appointment thus matters beyond the musical chairs of the senior management offices. If India's biggest private bank can drive deposit growth and margins, it has enough index weight to boost the market itself.

    The market cue: HDFC Bank could become a turnaround trade. Investors ought to watch whether analyst earnings estimates start to change, not just the share price.

    2. A RBI hike is now the base case

    A Reuters poll of 61 economists now has the RBI raising rates 25 bps to 5.5% next week, its first hike since 2023. Nearly 60% expect the move, and a small majority expect another hike by December. This is a big change from last month's consensus view, which was no hikes until March.

    Inflation hit 4.82% in August, with food and energy doing most of the damage. But here's the wrinkle: the government is now considering cutting import duties on lentils and yellow peas after poor monsoon rainfall hurt crops. Food inflation is already 5.9%.

    The market cue: A hike along with language from the RBI suggesting this is a short hike cycle could be a relief for banks, NBFCs and rate-sensitive equities. A hawkish signal towards repeated tightening would be more difficult.

    3. Results season may become about domestic India vs global tech

    Q2 earnings start next week, and analysts are watching something more interesting than estimate beats: whether domestic India beats global.

    ICRA expects corporate revenues to grow a healthy 13–15%, but margins could shrink 100–150 basis points as fuel, freight and other input costs bite. Domestic-facing businesses are still expected to hold up better than exporters.

    India's six largest IT companies are heading towards their weakest quarterly growth in three years, according to brokerage estimates. AI is cutting headcount needs and the prices clients are willing to pay. JP Morgan prefers financials, industrials, healthcare and discretionary consumption, while remaining cautious on IT.

    The market cue: Worth checking is if the earnings gap between domestic India and global India gets wider. If it does, the market's sector rotation could intensify.

    4. A Rs 1.86 lakh crore power trade is happening right now

    The government has approved a Rs. 1.86 lakh crore ($19.4 billion) clean-energy infrastructure programme.

    Rs 1.36 lakh crore goes towards transmission capable of handling another 135 GW of renewable power. Another Rs 50,000 crore will subsidise 50 GWh of battery storage.

    This is not another vague 2030 renewable target. This is concrete spending aimed at improving transmission capabilities, and in energy storage.

    The market cue: The next leg of India's power theme may move away from solar panel manufacturers towards transmission equipment, grid infrastructure, transformers, cables and battery storage.

    In a market desperate for 'earnings visibility', Rs 1.86 lakh crore of government-backed infrastructure is very visible.

    Heard on the street this week

    The latest buzz on the Jio listing: Street and media sources this week say that with roadshows done (US, UK, Dubai, Singapore, Hong Kong, led by Akash and Isha Ambani), the company is moving to file the red herring prospectus. The numbers being passed around, none of them in a formal company announcement: Issue size around Rs. 37,000–37,800 crore. This could be a pure fresh issue of up to 27 crore shares. The discussed price band roughly Rs. 1,350-1,450, suggesting a post-issue valuation near Rs 12.4-13.4 lakh crore. The target window for the listing is November.

    A parallel unconfirmed thread is that an interim India-US trade deal could land while Commerce Minister Piyush Goyal is in the US (29 September-5 October). Some write-ups citing 'sources' claim India would get a preferred tariff rate versus Bangladesh, Vietnam and China ahead of an 18 October deadline.

    All of this is still talk until something is signed. After all, we have heard this before.

    Disclaimer: This newsletter is for informational purposes and should not be construed as financial advice. Please consult your financial advisor before making any investment decisions.

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    The Baseline
    01 Oct 2026
    Five Interesting Stocks Today - October 1, 2026

    Five Interesting Stocks Today - October 1, 2026

    By Trendlyne Analysis

    1. Azad Engineering:

    This precision components maker rose 7% on September 29 after launching two new manufacturing plants for GE Vernova’s Gas Power business. Spread across 15,200 square metres, the plants will make specialised parts used in power-generation equipment, including components for gas turbines. Azad now operates three dedicated facilities for GE Vernova, more than for any other customer.

    The expansion deepens Azad's relationship with GE Vernova. In January 2025, Azad signed a six-year, $112 million deal to supply airfoils for advanced gas turbines, followed by a $53.5 million Steam Power contract in May 2025. 

    Whole-Time Director Vishnu Malpani explained the strategic value of dedicated plants: “Once a global marquee OEM integrates a dedicated qualified facility into their primary supply chain, shifting that business carries a huge switching cost.” Malpani highlights that this secures multi-year revenue and volume visibility. However, Azad relies heavily on a few key buyers. Its top customer drives 19% of FY26 revenue, while its six largest clients generate nearly half of all sales.

    Azad boasts an order book exceeding Rs 6,500 crore, nearly 11 times its FY26 revenue. However, management notes that converting this backlog into sales takes time because new machines and components require customer approval before full-scale production. The company is targeting annual revenue growth of over 25% and EBITDA margins of 32-35%. Trendlyne’s Forecaster expects FY27 revenue to grow 33.5%.

    The company is moving beyond individual components into manufacturing complete engines. In July, Azad delivered India’s first indigenous expendable turbojet engine to DRDO, handling the manufacturing, assembly, and integration.

    ICICI Securities upgrades Azad to ‘Buy’ from ‘Add’ with a target price of Rs 3,200, implying an 8% upside. The brokerage expects the transition from capacity building to order execution to fuel a 33% revenue CAGR over FY27-29, while net profits nearly triple. However, delays in customer approvals could slow the conversion of Azad’s large order book into revenue.

    2. Great Eastern Shipping Company:

    This shipping company rose 3% over the past week after Nomura initiated coverage with a “Buy” rating and a target price of Rs 1,965, implying about 28% upside. The brokerage is positive on the company’s countercyclical approach to fleet management, which involves buying ships when prices fall, selling into strength, maintaining low leverage and returning surplus cash. At the end of August, the firm announced a Rs 900 crore share buyback programme at a maximum price of Rs 1,530 per share.

    The company transports various commodities with its fleet of crude and product tankers, gas carriers, dry bulk vessels, offshore vessels and jack-up rigs. Earnings are currently benefiting from strong tanker rates and GE Shipping’s high exposure to the spot market. Forecaster expects revenue to grow 35% in FY27, with net profit growth of over 30%. 

    Management said disruptions around the Strait of Hormuz forced oil cargoes onto longer routes, sharply increasing demand. CFO G Shivakumar said, “Instead of importing from the Middle East, Asian countries had to source oil from the US or Brazil.” He added that this is a much longer voyage and therefore requires more ships.

    GE Shipping has over Rs 8,000 crore in cash as of the June quarter and is taking a cautious approach to fleet expansion as vessel prices and freight rates have risen. The firm is therefore prioritising replacing older vessels with younger, more fuel-efficient ships while broadly maintaining capacity. In July, it replaced an older tanker with a younger vessel. Management says newer ships can use 20-25% less fuel than vessels built before 2013, improving operating economics.

    Nomura expects the fleet to grow from around 40 vessels currently to 62 by FY29, assuming a meaningful decline in tanker rates. The main risk is that the current freight environment has already triggered a large wave of new vessel orders. Management expects oversupply risk to increase as these ships are delivered, while a normalisation in trade routes could also push freight rates lower.

    3. Dr Reddy’s Laboratories: 

    This pharmaceutical giant's stock price jumped 2.5% on September 29 after Citigroup upgraded it to a ‘Buy’ rating from ‘Sell’. The brokerage also raised its target price to Rs 1,450, implying a 20.2% upside. Citigroup turned bullish on the drugmaker, citing clear earnings visibility, strong sales in non-US markets, and margin growth potential.

    Analysts believe the company will navigate market competition using its diverse product lineup and massive global presence. Recent developments suggest the drugmaker has crossed its major growth hurdles. Crucially, the company has applied for US FDA approval for an Abatacept biosimilar, a key arthritis treatment with a global market size of $3.1 bn in 2025. The company expects final regulatory approval for the drug by the end of 2026.

    Dr Reddy’s EBITDA margin crashed by 14.2 percentage points YoY in Q1FY27. Semaglutide-related setbacks, including a Rs 240 crore provision, lost production incentives, and lower sales, caused this steep drop. Additionally, soaring freight and raw material costs stemming from the West Asia conflict squeezed profits. However, the brokerage expects the upcoming resumption of Semaglutide supplies in Canada to revive both revenue and margins.

    Together, the upcoming Abatacept launch and resumed Semaglutide supplies will generate an extra $350-400 million in revenue through FY29. This cash injection will help the company offset the revenue cliff for its generic cancer drug, Revlimid, following the expiry of volume caps this January.

    Citi predicts Dr Reddy’s operating margins will rebound to 20% by FY29, up from an estimated 14% in FY27. The Abatacept launch and Semaglutide recovery alone will drive a 450 basis point margin expansion. Citi expects North American revenues (27% of topline) to bottom out in FY27, and highlights the company's execution in the non-US markets (62% of revenue). Accelerating growth across India, Europe, and emerging markets is shifting the business toward more sustainable, long-term earnings streams.

    Management remains confident about a recovery in H2FY27. CEO Erez Israeli said, “The strength of our base business and ongoing productivity initiatives will continue to support double-digit base business growth.”

    4. Fortis Healthcare:

    The stock of this healthcare facilities company declined 5.3% on September 30 after the Supreme Court raised concerns over steep medicine markups in private hospitals. The court questioned why essential drug prices cannot be capped at a 16% margin over the price-to-retailer (PTR) and criticized hospitals requiring inpatients to buy medicines exclusively from in-house pharmacies. While the court held off on immediate regulatory action to give the government time for consultations, the next hearing is scheduled for October 12, 2026.

    Medicine and consumable sales generate about 12 to 15% of Fortis’ overall revenue. Because Fortis is structurally a clinically focused hospital operator, unlike peers like Apollo Hospitals with vast retail pharmacy footprints, potential regulatory price caps are expected to have a limited overall impact on the company.

    Compounding its legal troubles, the Delhi High Court ordered a forensic audit into Fortis following Daiichi Sankyo’s push to enforce a Rs 3,500 crore arbitral award against former promoters Malvinder and Shivinder Singh. 

    Fortis management denied involvement in the disputed stake sale and ownership change, noting the transactions predated IHH’s control. It said the company complied with all applicable laws and that the forensic audit would not affect its brand, operations or patient inflow.

    Despite legal headwinds, Fortis’ core operations remained strong, with the hospital segment serving as the primary growth driver and contributing around 85% of consolidated revenue. Looking ahead, Fortis plans to add about 2,000 brownfield beds over the next four years, including 500 beds in FY27. Motilal Oswal highlighted bed expansion and improving occupancy rates as key drivers of volume-led growth and reaffirmed its ‘Buy’ rating with a target price of Rs 1,130.

    5. Petronet LNG:

    This oil marketing & distribution company rose 1.2% on Monday after Motilal Oswal reiterated its “Buy” rating with a target price of Rs 362, implying an upside of 26.8%. While the rating was unchanged, the fresh update pushed back on three key worries behind Petronet LNG’s sharp fall over the past seven months: costly LNG, Qatar supply disruption and a possible fee cut at Dahej, its main LNG processing plant in Gujarat. 

    The biggest near-term problem is expensive LNG. Costs for users such as fertiliser makers, factories and city-gas companies have more than doubled, making buyers reluctant to lock into fresh long-term contracts. Motilal expects demand, and in turn Petronet’s terminal usage, to pick up once prices become more affordable.

    There are some early signs of demand picking up, with LNG shipments from Deepak Fertilisers and ExxonMobil coming in. The company is also adding capacity. It spent Rs 560 crore to raise Dahej’s annual capacity by 29%, at roughly one-tenth the cost of building a similar new terminal.

    Motilal Oswal also says the risk of the Dahej facility charging lower fees may be overstated. About half the terminal’s business is tied to long-term contracts, and management says the fee on the renewed Qatar deal, covering 7.5 million tonnes a year, will not fall below current levels. The rest is locked in through 2035 with agreed fees and minimum usage commitments.

    Analysts see the company’s Kochi facility emerging as a new growth driver. It ran at just about 24% of capacity in Q1FY27, largely because it has not been connected to a wider pipeline network. That should change once the Kochi-Mangalore-Bangalore pipeline links it to the national gas grid. Motilal expects the pipeline to start by March 2027, while management sees utilisation rising to around 40% over the next two to three years.

    LNG supplies from Qatar remain the main near-term risk, but Petronet is replacing much of the missing supply from elsewhere. Vice President of Finance & Accounts Debabrata Satpathy said, “Even if that volume is not available from the Gulf region, more than two-thirds of that is being compensated from other parts of the world.” He added that once Gulf supplies return, capacity utilisation should “improve quite a bit.”

    Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

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    The Baseline
    30 Sep 2026
    Analysts pick their winners: Five stocks expected to shine in Q2 results

    Analysts pick their winners: Five stocks expected to shine in Q2 results

    September hasn't exactly been a month investors will remember fondly. The Nifty 50 is down nearly 13% this year and is heading for its eighth straight weekly loss. With just one quarter left, the index is staring at its first yearly loss since 2015.

    One of the biggest headaches? Oil. Rising crude prices are adding to inflation worries and squeezing company margins, putting more pressure on earnings and investor sentiment. For once, we'll spare you a certain name from Washington.

    As Q2FY27 earnings season begins, HDFC Securities expects earnings growth to cool to 13-14%, from 18-19% in the previous quarter. But Unmesh Sharma, Head of Institutional Equities at HDFC Securities, says growth remains strong despite the slowdown.

    Sharma is also upbeat on mid- and small-cap stocks, where he sees several emerging investment themes.

    The market may be in a bad mood, but some companies, thankfully, are exceptions.

    In this week's newsletter, we look at five companies that analysts expect to post strong revenue and earnings growth, despite the broader market headwinds. 

    The Q2 frontrunners: Analysts pick their top five

    As we head into the Q2FY27 results, we shortlist five stocks from the Nifty 500 that are predicted to post strong YoY and QoQ revenue and net profit growth, according to Trendlyne’s Forecaster. These companies have already set the bar high with good results in Q1FY27.

    All five stocks in focus, Multi Commodity Exchange (MCX), Coforge, APL Apollo Tubes, Bharat Heavy Electricals (BHEL), and Redington, are from different sectors. 

    These stocks have outpaced the Nifty 500 over the past year and quarter. 

    All five stocks have either ‘Good’ or ‘Medium’ scores across Durability, Valuation and Momentum categories. 

    Iron & steel products, heavy electrical equipment, commodity trading & distribution, IT consulting & software, and capital markets feature in the list.

    Steel product makers are expected to benefit from better pricing and a recovery in construction demand, while heavy electrical equipment makers are likely to benefit from strong demand from the power sector.

    Technology distributors could see continued demand for premium electronics and technology products, while mid-sized IT companies may benefit from large deal wins and AI-led spending.

    MCX turns volatility into a business model

    MCX has been on a roll, more than doubling investors' money in the past year, and the momentum continues. Trendlyne's Forecaster expects Q2 revenue to rise 93% and net profit to more than double YoY.

    The biggest driver is commodity options, led by gold and silver, followed by crude oil and natural gas. 

    MCX's client base has nearly doubled in a year, partly as traders moved away from equity derivatives after SEBI tightened trading rules. 

    Sharp swings in gold and silver prices have also pushed more activity towards commodities. Gold and silver now account for about two-thirds of MCX's daily trading.

    MCX has more than 99% of India's exchange-traded bullion, base metals and energy derivatives market. nd because an exchange can handle higher trading volumes without a similar increase in costs, the additional revenue can translate into a significant increase in profit. 

    Praveena Rai, MD & CEO of MCX, said, "Volatility is not the enemy - unhedged exposure to volatility is."

    MCX is also expanding into coal and minerals, planning to invest up to Rs 200 crore in new trading platforms.

    Coforge buys its way into the AI big league

    It’s been a rough year for Indian IT. 

    TCS, Infosys and Wipro are down about 30% each, but Coforge has gained 17%. Trendlyne’s Forecaster expects Q2 revenue to rise 57% YoY and net profit to rise 74%.

    Part of the growth is coming from Encora, the US-based AI engineering firm that Coforge acquired for $2.35 billion. 

    Q2 is the first full quarter to include Encora, and management expects its highest-ever number of large deals. After the Q1 results, CEO Sudhir Singh said he expected “very robust growth, starting with Q2 itself.”

    Coforge has also taken a different approach to the AI opportunity. While larger IT firms still get a significant share of their business from legacy software maintenance, Coforge has focused more on helping companies modernise their systems for AI. About 86% of its revenue now comes from AI, data and cloud work. The company is also shifting from billing clients for hours worked to charging for the outcomes it delivers.

    A key risk is governance. Advent, Coforge’s largest shareholder, opposed Chairman OP Bhatt’s reappointment. Bhatt later resigned after an internal audit found he had withheld board evaluation findings, sending the stock down nearly 9% intraday on September 9. 

    APL Apollo: Riding the infrastructure recovery

    APL Apollo makes steel tubes used in warehouses, airports, metro projects and solar frames. The stock is up 33% in a year. Trendlyne’s Forecaster expects Q2 revenue to rise 33% YoY and net profit 21%, as construction demand recovers from a relatively weak Q1.

    Sanjay Gupta, Chairman of APL Apollo, said, "We expect demand conditions to improve in the coming quarters on the back of an improved government budget allocation for the infrastructure sector." 

    Q1 was a tough quarter for APL Apollo, with higher steel prices and problems at its UAE plant weighing on the business. However, profits held up because the company was able to pass on higher costs without losing customers. APL Apollo controls about 65% of India's high-quality steel tube market. 

    Demand could get a boost as builders shift towards faster steel structures and solar projects expand. But steel prices remain a concern. When prices rise sharply, dealers often hold back on purchases, as they did in Q1.

    BHEL powers up after years of stalling

    For years, BHEL won large orders but struggled to execute them. That now seems to be changing. The stock is up 79% in a year, while Trendlyne's Forecaster expects Q2 revenue to grow 29% YoY and net profit 72%

    Much of the improvement is coming from faster execution. BHEL is paying suppliers sooner, and the government has allowed it to import key components that were holding up projects. That is helping its factories run at higher capacity and allowing projects to move ahead faster. 

    In Q1, it earned a profit of Rs 377 crore against a loss of Rs 455 crore a year ago.

    BHEL has built over half of India's coal power capacity. Competition is limited in large thermal power tenders. Global players have largely exited coal, while Chinese companies face bidding restrictions in India. At the same time, rising power demand and the need for round-the-clock supply are keeping coal power relevant. 

    K Sadashiv Murthy, CMD of BHEL, said, "The renewed emphasis on energy security, following recent geopolitical disruptions, has reinforced the role of coal-based generation in national planning."

    The key risk is execution. Power projects take years to complete, and rising costs could squeeze BHEL's thin margins.

    Redington rides the premium gadget wave

    When you buy an iPhone or Lenovo laptop from a neighbourhood store, it probably came through Redington. The distributor buys products in bulk, stores them, delivers them to retailers and lets them pay later.

    The stock is up 54% in a year. Trendlyne’s Forecaster expects Q2 revenue to rise 23% YoY and net profit 34%.

    Three trends are helping Redington grow. Indians are spending more on premium smartphones, with iPhones now accounting for nearly a third of its sales. Laptop prices are also rising as a global memory chip shortage pushes up costs. 

    Companies are also spending more on cloud and cybersecurity, where Redington earns better margins than on hardware. 

    However, margins remain thin. Net profit is just 1.4% of revenue, and the company is heavily dependent on Apple, which accounts for nearly a third of sales.

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    The Baseline
    30 Sep 2026

    IRDAI wants to cut insurance selling costs. Who takes the hit?

    By Anagh Keremutt

    The Insurance Regulatory and Development Authority of India (IRDAI) wants every Indian to have adequate life, health and property insurance by 2047, and every business to have suitable cover.

    To make insurance more affordable, the regulator wants insurers to spend less on selling policies and pass the savings to customers. Its September consultation paper, “Recalibrating Economics of Insurance Distribution,” proposes new limits on commissions and lower limits on insurers’ overall expenses.

    Ajay Seth, Chairman of IRDAI, says, “Mis-selling is arising because upfront sales commissions are too high.” He adds that first-year commissions on new business can be as high as 40-50%, incentivising sellers to focus on making the sale rather than recommending the right product.

    The proposals are not final, but they will reduce what PB Fintech and lenders such as L&T Finance earn from selling insurance. 

    Life insurers could save on commissions, but lower payouts may discourage sellers and hurt sales. Motor insurers may fare better because vehicle owners must still buy third-party cover.

    In this edition of Chart of the Week, we look at who stands to lose and which insurers have more room to adjust.

    Why IRDAI wants to change the model

    When you buy an insurance policy through a distributor, the insurer pays that seller for bringing in the business. For example, PB Fintech’s Policybazaar earned about Rs 18.5 in revenue for every Rs 100 of premium customers paid through its core online insurance business in Q1FY27.

    IRDAI’s concern is that these selling costs are rising much faster than the business they generate. Between FY23 and FY25, commissions and other payments to banks and other corporate agents covered by IRDAI’s life-insurance study jumped 125%, while premiums from the new policies they sold rose only 28%.

    General insurance includes vehicle, health and property cover. Premiums from policies sold through brokers grew 37% during the same period, while their commissions rose 173%. Within this, motor insurance showed a wider gap: premiums rose about 34%, while commissions surged 259%.

    Overall costs have risen too. Private life insurers’ commissions and running expenses increased from 16.5% of premiums in FY21 to 20.2% in FY26.

    IRDAI wants to bring this spending down across the industry. For general insurers, it proposes lowering the limit from 30% of premiums to 25% within two years and 20% within five.

    Life insurers would face a ceiling of 15% within two years and 12.5% within five. Those already below these levels in FY25, such as SBI Life and LIC, would face a stricter five-year ceiling of 10%.

    Commission caps squeeze insurance platforms and lenders

    IRDAI’s proposal dealt a sharp blow to listed insurance distributors. PB Fintech’s insurance-related businessesgenerated about 86% of group revenue in Q1FY27. That helps explain the stock’s 36% plunge on September 24. Turtlemint fell to its lower circuit as it earns nearly all its revenue from insurance distribution.

    The proposed limits cover commissions from both new policies and renewals across life and general insurance. For a new individual health insurance policy, distribution companies would face a standard commission cap of 15% of the premium, compared with the current industry average of 24%, according to Kotak Institutional Equities.

    For individual health-policy renewals, distribution companies would face a commission cap of 5%. Jefferies estimates that current commissions are about 15% for policies covering non-senior citizens. A company earning that rate would lose two-thirds of its renewal fee if the cap takes effect.

    Limits for life insurance vary by policy. For individual term policies paid for over several years, IRDAI proposes capping distribution companies’ commissions at 25% of the first-year premium and 7.5% of later premiums. A term life policy, for instance, pays out if the insured person dies during the period of cover

    Yashish Dahiya, Chairman & Group CEO of PB Fintech, said, “Life insurance should see limited impact, but general insurance revenue could shrink to about one-third to 40% of current levels. We may then need to spend less on marketing, sales and customer support.” The company also said it is still unclear whether the new limits would apply to policies already sold.

    Lenders face a sharper cut in commissions from life insurance sold with loans. For policies paid for in full upfront, IRDAI proposes capping the lender’s commission at 2% of the premium, compared with the current average of 22%.

    L&T Finance, Bajaj Finance and Cholamandalam Investment & Finance, among others, fell sharply amid the sell-off. According to SOIC, L&T Finance earned insurance commissions worth 25.6% of its FY26 pre-tax profit, compared with 17.8% at Poonawalla Fincorp and 16.3% at Cholamandalam.

    Those commissions are income for lenders and distributors, but a cost for insurers. So does a smaller commission bill make insurers the clear winners?

    Lower commissions don’t guarantee bigger profits

    Lower commissions could improve insurers’ margins, but distributors may have less incentive to sell policies, which could hurt sales.

    Krishnan Ramachandran, MD & CEO of Niva Bupa, calls the proposals a “net positive”. He expects lower commissions to help the insurer keep health premiums affordable for longer, supporting demand while improving its own economics. “We are in a comfortable situation to bring our expenses within the proposed 25% limit over the next two years,” he added.

    But the benefit may not be equal across insurers. KG Krishnamoorthy Rao, MD & CEO of Generali Central Insurance, says smaller insurers still have to bear many of the same technology, compliance and staffing costs as larger rivals. That makes the proposed expense limits harder for them to meet as a share of a smaller premium base.

    Demand for motor insurance could hold up even if distributors earn less. Vehicle owners still have to buy third-party cover, which pays for injury or damage caused to others.

    IRDAI proposes zero commission for distribution companies selling this cover with new vehicles. With compulsory cover supporting demand, motor insurers could save on selling costs. ICICI Lombard and Go Digit rose amid the September 24 sell-off on expectations of these savings. 

    For life insurers, greater reliance on banks, agents and other sellers does not always mean higher costs. Some already spend a smaller share of premiums than their peers, which could leave them with less to change under the proposed limits.

    SBI Life, for instance, generated about 85% of its premiums from new individual policies through these sellers in FY26. But it spent just 10.6% of total premiums on commissions and running expenses. 

    HDFC Life and Axis Max Life (majority-owned by Max Financial Services) relied less on these sellers, but spent about 21–25% of premiums on these costs, roughly twice SBI Life’s 10.6%. LIC kept costs low too, at 11.9% of premiums, compared with about 18% at ICICI Prudential Life.

    If these proposals become final rules, investors should look for insurers that keep bringing in more business while reducing expenses as a share of premiums. If distributors sell fewer policies, insurers may need to find customers themselves while staying within the new spending limits.

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    The Baseline
    29 Sep 2026
    Five stocks to buy from analysts this week - September 29, 2026

    Five stocks to buy from analysts this week - September 29, 2026

    By Abdullah Shah

    1. Century Plyboards (India):

    Axis Direct initiates coverage on this wood-panel manufacturer with a ‘Buy’ rating and a target price of Rs 820, an upside of 23.3%. Analysts Eesha Shah and Vishal Jagwani expect Century Plyboards’ next expansion phase to drive its revenue target of Rs 12,000 crore by FY30-31. 

    The company is building a new plywood plant in Punjab, investing Rs 1,130 crore in a medium-density fibreboard (MDF) and plywood project in Uttar Pradesh, and phasing development of an Odisha facility. Plywood currently contributes around 54% of its revenue, but the company is reducing its reliance on the segment by expanding newer businesses like MDF. Management anticipates MDF to match its plywood business size within two to three years. They target a 15%+ EBITDA margin for the segment, while analysts project MDF revenue to grow 20% annually over FY27-29.

    Shah and Jagwani predict that new plants and higher factory usage will boost profitability from FY27. Analysts forecast overall revenue, EBITDA, and net profit CAGRs of 17%, 24%, and 35% through FY27-29. The company also aims to increase its plywood market share from around 10% to 15% over the medium term, supported by 12-15% annual volume growth over five years. 

    2. Thangamayil Jewellery:

    BOB Capital Markets upgrades this jewellery retailer to a ‘Buy’ rating from ‘Hold’, with a target price of Rs 6,314, an upside of 21.3%. Analysts Lavita Lasrado and Nistha Pala believe that store expansion will drive the next phase of growth, with Chennai at the centre of the plan. 

    Thangamayil aims to increase its Greater Chennai network from 14 to 25 stores over the next 18 months. Chennai already generates 20-23% of total revenue. The company also plans to open roughly 10 stores every year across Tamil Nadu over the next three to four years before entering other states.

    Management projects this expansion will drive a 25% revenue increase while maintaining an EBITDA margin near 6%. Jewellery demand dropped in Q1FY27 as high gold prices deterred buyers. However, recent gold price drops have revived customer interest. Management notes that buyers delayed rather than cancelled purchases, and expects festive and wedding demand to power a recovery in H2FY27.

    Lasrado and Pala highlight strong store productivity, with inventory turnover of 3.2 times annually, beating management’s target of 2.5-3 times. They forecast earnings per share to grow at a 24% CAGR over FY27-29, backed by new stores, demand recovery, and steady sales at existing locations.

    3. Pearl Global Industries (PGIL): 

    ICICI Direct upgrades this apparel maker to a ‘Buy’ rating from ‘Hold ’, with a higher target price of Rs 1,600, an upside of 24%. Analysts Kaustubh Pawaskar and Abhishek Shankar believe PGIL’s manufacturing presence across several countries gives it an advantage in serving global customers and increasing its share of exports.

    The company plans to increase its annual apparel production capacity from 10.1 crore pieces in FY26 to 17-17.5 crore pieces. Its factories in Bangladesh, Vietnam, Indonesia and Guatemala are already operating at 80-90% capacity, leaving limited room to handle additional orders without expansion. 

    PGIL also plans to add capacity in India, supported by government incentives for textile manufacturing and new free trade agreements (FTAs). The UK is estimated to become a bigger market, with analysts forecasting its contribution to revenue to rise from around 4% currently to 10% by FY30, helped by the India-UK FTA.

    Pawaskar and Shankar believe PGIL’s diverse production and broad customer base also reduce its dependence on any single market. This has helped the company manage disruptions such as the West Asia conflict and US tariffs. Management targets revenue of Rs 9,000-10,000 crore by FY30, implying 16-18% annual growth, driven by new customers, higher business from existing clients, expansion into new product categories and better utilisation of its factories.

    4. SPR Auto Technologies: 

    Motilal Oswal initiates coverage on this auto parts maker with a ‘Buy’ rating and a target price of Rs 6,150, an upside of 29.5%. Analysts Radha Agarwalla and Jeemit Shah note that SPR is transforming from a traditional piston maker into a diversified mobility platform via acquisitions. This strategy builds a scalable auto component platform with balanced exposure across powertrains.

    SPR remains a strong player in its core piston business, with around 45% market share. Analysts expect this business to continue growing as pistons are still required in petrol, diesel and other fuel-based engines. The company is also increasing sales in the replacement market and industries outside automobiles, reducing its dependence on any one segment. At the same time, the exit of some global competitors from conventional engine components could help SPR gain incremental market share.

    Agarwalla and Shah report that recent acquisitions of Antolin, Takahata, Timex Group Precision Engineering, and EMF Innovations generate about 35% of revenue. These businesses have expanded the company into precision plastic components while giving it a wider mix of products, customers and markets. They project a revenue and net profit CAGR of about 21% over FY27-29. 

    5. Dr Lal PathLabs (DLPL): 

    Emkay retains its ‘Buy’ rating on this healthcare diagnostics provider and raises its target price to Rs 2,100, an upside of 7.7%. Analysts Anshul Agrawal and Vivek Sethia forecast DLPL to benefit from its strong market position as more customers move towards organised diagnostic chains and preventive health testing becomes more common.

    The company has approved the acquisition of a 70% stake in SN Genelab, a diagnostics company focused on serving hospitals, laboratories and other businesses, for Rs 168 crore. Management projects the deal to strengthen DLPL’s range of specialised tests and reduce its dependence on any one region. Analysts anticipate DLPL to cross-sell SN Genelab tests across its B2B and B2C channels, with revenue gains reflecting in the next two to three years.

    Agrawal and Sethia also see advanced testing as an important growth area for the company. DLPL is investing in genomics, which uses genetic information to help diagnose and understand diseases. These capabilities could help it offer more specialised services and stand out from other large diagnostic chains. The analysts expect revenue to grow at a 14.6% CAGR and net profit at a 16.7% CAGR through FY29.

    Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

    (You can find all analyst picks here)

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