Trendlyne Blog: The Baseline, Latest on stock market and finance in India and the world.

15 May 2025, 09:48AM

A car running on flat tires: Pakistan's economy is struggling

India just had one those weeks that reminds me of the Lenin line: “There are decades where nothing happens, and weeks where decades happen.” A terrorist attack took two countries to the brink of full-blown war and back. The 2025 conflict between India and Pakistan was different, or “dangerously different” from previous ones, as The Economist put it.

An unanswered question remains — why would Pakistan, with its economy on a ventilator, enter a fight it simply couldn't afford? Forget regional experts. Even checking with ChatGPT first would have helped:

But this assumes that Pakistan's leaders are rational actors. It's no secret that its economy has been in a dire state for a while now, with high inflation and unemployment, falling GDP growth, soaring debt, and barely enough reserves to buy a few weeks of imports. The country has clung to the life-raft of international aid — just a day before the ceasefire, the IMF handed Pakistan a billion dollars.

We take a closer look at what's happening with our troubled neighbour.

Is the IMF hurting Pakistan?

The IMF’s bailout of Pakistan made headlines on May 9. It released $1.3 billion, the second tranche of its $7 billion package. The Russia-Ukraine war has spiked commodity prices and pushed Pakistan’s import bill through the roof. With enough money for just two weeks of imports, the Pakistan rupee tumbled, and inflation surged past 30%, sending the government into panic mode.

Many Indians were taken aback by IMF's willingness to give money to a country that has a long history of sheltering terrorists, from Osama Bin Laden to the Pahalgam attackers. But IMF has kept funding Pakistan to avert its bankruptcy and prevent regional chaos.

Pakistan has been in a never-ending loop of crisis and bailout, rinse and repeat. This is the 24th bailout of its economy since 1958. Economist William Easterly has noted that bailouts to bad governments usually delay reforms and worsen poverty. Imagine giving a gambler a bottomless wallet: when a country knows that help will keep coming, it has little incentive to fix its root problems.

The IMF must approve Pakistan’s FY26 (July ending) budget, scheduled in the first week of June, for it to go forward. Reports suggest that Pakistan is planning an 18% increase in defence spending. The fund’s bailout programme comes with conditions such as increasing tax revenue, and reducing wasteful expenditure. It will be interesting to see how the fund views this spending increase.

A grim comparison with India

On one side, we have a country that runs on bailouts. On the other side is India, which has not taken money from the IMF since 1991. Pakistan's economy is barely one-tenth the size of India's. India's foreign exchange reserves are nearly double Pakistan's GDP.

The comparison between the two neighbours paints a harsh picture:

A car running on flat tires? Pakistan has structural issues that need repair

High birth rates in Pakistan have led to a population boom, but it isn’t able to reap its benefits. For every 100 people working, 70 are dependents. This is a heavy load on family budgets, and has kept the national savings rate stubbornly low.

High GDP growth could have absorbed this pressure. But growth has been sluggish, and Pakistan's labour productivity ranks amongst the lowest globally. Years of ignoring education and healthcare have only made things worse.

Pakistan has to import essentials like fuel, machinery, edible oils, and fertilisers, which make up nearly 60% of its total imports. To keep them affordable, it needs to stop the rupee from falling. That means selling dollars from its reserves. But instead of earning those dollars through exports, it borrows them from institutions like the IMF. And when it’s time to repay, it resorts to more bailouts and relief programs.

Pakistan's stock market reflected the costs of escalation

Even if the IMF looked the other way, financial markets didn’t. The contrast was stark: relative calm in India, turmoil in Pakistan. That alone reflected the underlying difference in economic resilience.

Before Operation Sindoor, India had suspended the Indus Water Treaty, closed borders, and halted exports. Pakistan depends on the Indus basin for 80% of its farm water. Shashi Tharoor, a former Foreign Minister, said that Pakistan could run dry within four days in the event of a full-scale conflict. Moody’s also flagged that escalation could destabilise the economy and freeze foreign lending.

Between the Pahalgam attacks (April 22) and the ceasefire (May 9), Pakistan’s KSE-100 index dropped 13%, while India’s Nifty 50 stayed steady, up by 0.4%. On May 7, the day of Operation Sindoor, Indian markets opened lower – down by 0.6%, while KSE100 opened 6% lower. Post-ceasefire, both the markets rejoiced - Nifty 50 up by 3.8% from May 9, and KSE100 up by 13.3%, showing that the cost of conflict was simply too high for Pakistan.

Glimmers of hope

Indians shouldn't be rooting for Pakistan’s failure — a failed state tends to breed more terrorism, not less. The economy is very fragile right now, due to low productivity, poor human capital, and a dangerous dependence on imports and foreign lending.

With the help of the IMF, the Pakistani economy showed signs of revival in 2024, post-bailout. In March 2025, the fund noted, “Pakistan has made significant progress in restoring macroeconomic stability.” Prices and exchange rates were stabilising, interest rates softening.

Fitch upgraded Pakistan from CCC+ to B- while projecting a stable outlook. In December 2024, the government even launched a five-year economic blueprint, focused on enhancing exports, and digital transformation.

The vibes around Pakistan’s economy were getting better. Morgan Stanley listed it as an ‘unexpected winner’, as the KSE100 index gained 84% in 2024. Portfolio manager, Steven Quattry said, “You don’t have to stretch your imagination to make an investment case for Pakistan”. Investors like BlackRock, Eaton Vance Corporation, Legal & General, and Evli raised stakes in Pakistani companies.

Guns vs. Butter

So it is surprising that leaders acted the way they did amidst the country’s economic revival journey. Pakistan has risked losing not just manpower, infrastructure, and investors, but also long-term faith in its capability to revive itself.

Pakistan is a classic case of the ‘guns vs. butter’ dilemma. Every rupee spent on defence is a rupee not spent on education, healthcare, or food.

For example, in the late 1980s, Pakistan’s defence spending peaked at 7% of GDP. World Bank economist Parvez Hasan calculated that if just half of that had gone to development instead, Pakistan’s GDP growth from 1970 to 2010 could have been 2 percentage points higher, and the economy could’ve been twice its current size.

Frustration on the ground has been growing year after year. “They talk a lot, but we don’t see much change. It feels like they don’t understand what people are going through,” said a Pakistani student.Unless something dramatically changes, Pakistan’s economy will remain hostage to violence, underperformance and social instability - and a constant threat to India.

The Baseline

14 May 2025, 09:48AM

Chart of the week: From partnerships to diversification: Dixon Technologies powers ahead to new highs

By Omkar Chitnis

From the moment we wake up, devices shape our routines—the smartphone by our bedside, the TV in our living room, the washing machine humming in the background, and the laptop powering our workdays. In a world increasingly reliant on electronics, Dixon Technologies is seizing the chance to solidify its position as a leading player in the industry.

Over the past year, this third-party consumer electronics manufacturer saw its shares reach new highs. Strong financial results, strategic partnerships with global brands, and a rapid expansion of production capacity, supported by India’s Production-Linked Incentive (PLI) scheme, have fuelled this growth.

The company's share price tripled since January 2024, rising from Rs 6,500 in January 2024 to Rs 19,148 in May 2025 as it expanded its presence beyond electronics manufacturing services.

Saurabh Gupta, CFO of Dixon Technologies, said, “India’s push for electronics manufacturing presents a $10 billion opportunity in IT hardware. We expect Dixon to grow in this segment at a rate of 35–40% annually in the next few years.”

However, this optimism comes with a caveat. Dixon’s share price, with a P/E ratio of 122.6, is trading above the industry average of 85.1. Yet, it remains below the company’s historical averages. Dixon’s 5-year average P/E and forward P/E suggest the stock is still undervalued.

In this edition of the Chart of the Week, we analyze the company’s price action from its early joint ventures (JVs) with global brands in 2024 to its recent diversification.

Amid the reversal of US-China tariffs, companies like Apple and Alphabet view the tariff exemption as temporary relief. However, they plan to shift production to India to reduce dependency on a single country and mitigate future political risks.

Indian Electronics Manufacturing Service (EMS) companies like Dixon Technologies, Kaynes Technology, and PG Electroplast are capitalizing on this shift.

Dixon’s new deals power growth in CY24, but policy shift cools momentum

Dixon started CY24 with strong momentum, with its stock rising nearly 11.6% in February 2024, after commissioning a new manufacturing facility in Dehradun to produce washing machines for domestic and global players. The company also entered a contract manufacturing agreement with Compal Smart Device to manufacture mobile phones.

Three months later, Dixon's stock rose 27.5% in June 2024 after it signed a JV agreement with HKC Corporation to manufacture Liquid Crystal Modules (LCM) for smartphones, TVs, and auto displays.

However, Dixon’s momentum faced a temporary setback in July 2024 when the Indian government reduced import duties on mobile phones and chargers from 20% to 15%. While the move aimed to make devices more affordable for consumers, it raised concerns about increased competition from imported phones, potentially dampening the demand for Dixon’s local assembly services.

Despite the import duty change, Dixon's management expressed optimism. Atul Lall, MD of Dixon Technologies, stated, “We are optimistic on the government's positive response to the production-linked incentives scheme in electronics manufacturing. The mobile manufacturing ecosystem in India has matured, and the changes in import duties do not affect India’s competitiveness or strength.”

Following the brief downturn, Dixon’s stock regained momentum in September 2024, driven by its subsidiary Padget Electronics signing a Memorandum of Understanding (MoU) with Asus India to manufacture IT products and laptops.

After a series of agreements and MoUs, investors’ focus shifted to Dixon's Q2FY25 results. The stock gained after its net profit grew 263.2% YoY to Rs 389.9 crore on November 6, 2024, driven by higher mobile phone production and strong growth in the electronics manufacturing services (EMS) segment. Revenue rose 133.3% YoY to Rs 11,534 crore following its acquisition of an EMS provider, Ismartu, in mid-August.

Saurabh Gupta, CFO at Dixon Technologies, stated, “The 56% stake in Ismartu India, with its strong presence in smartphones and feature phones, is expected to add Rs 7,000–8,000 crore to Dixon's revenue by FY27.”Currently, Dixon derives 9% of its total revenue from the US market, primarily through manufacturing Motorola phones.

Dixon's CY24 rally stalls in early CY25

Building on a series of agreements and MoUs, Dixon Technologies' stock rose for six straight sessions in December 2024. The upward trend continued after it signed a JV with Vivo India to establish an original equipment manufacturing (OEM) business for Vivo's smartphones in the Indian market.

Dixon delivered an impressive 173.6% return in CY24, driven by strong growth and expanding partnerships. However, the momentum faltered at the start of CY25. On January 8, the Tata Group announced an $18 billion investment to enter the electronics and semiconductor space, extending far beyond its existing work with Apple, which had started in 2023. This news led to a 12.2% drop in Dixon’s share price as investors reassessed the competitive landscape.

Ekta Mittal, senior analyst at CCS Insight, notes, “Tata Electronics, looking to add clients like Xiaomi and Oppo, will intensify competition in the market, and a price war will follow. Smaller EMS players will find it difficult to match Tata’s scale, supplier deals, and end-to-end delivery capabilities.”

Dixon’s challenges worsened on January 21, 2025, when it missed Q3FY25 net profit estimates by 18.5%, due to higher depreciation and interest costs. The stock plunged 13% as brokerages responded with caution. Jefferies maintained an “underperform” rating, while Goldman Sachs initiated a “sell,” pointing to steep valuations and signs of slowing growth.

Despite a 7.4% decline in its stock price over the first four months of CY25, Dixon’s shares began to recover in late March 2025 after the company partnered with Signify Innovations (Philips Lighting) to expand its product portfolio in lighting products and accessories.

In April, Dixon stock gained momentum on reports suggesting that Alphabet may shift part of its Pixel smartphone production from Vietnam to India due to higher US tariffs on Vietnamese goods than Indian goods. Dixon currently manufactures nearly 70% of Pixel phones in India, and the stock also rose following the government announcement of the Rs 22,919 crore PLI scheme for non-semiconductor electronic components.

Dixon derives 89% of its revenue from mobile phone manufacturing. The company is expanding its product portfolio to include home appliances and consumer electronics to reduce its reliance on this segment.

Dixon plans to invest Rs 1,000 crore in high-margin components such as camera modules, battery packs, and precision parts. In H2FY25, the company secured orders from four global IT brands—HP, Lenovo, Acer, and Asus—for laptops and related IT hardware components. To cater to this demand, Dixon is setting up a dedicated manufacturing unit for IT hardware and telecom products, with production expected to begin in FY26.

Based on this development, Dixon is targeting Rs 3,500 crore in revenue from its IT hardware business by FY26. Atul Lall, MD of Dixon Technology, said, “For the sector and Dixon, the growth path is going to be extremely aggressive in investment and diversification in the future.”

The Baseline

13 May 2025

Five stocks to buy from analysts this week - May 13, 2025

By Divyansh Pokharna

1. Godrej Consumer Products:

Anand Rathi reiterates its ‘Buy’ rating on this personal products maker with a target price of Rs 1,430, indicating an upside of 12.9%. In Q4FY25, the company’s revenue rose 6.3% YoY to Rs 3,598 crore, driven by 6% volume growth. However, EBITDA margin declined 120 bps to 21.1% due to inflation in palm oil costs.

Analyst Ajay Thakur expects the overall EBITDA margin to rise by 130 bps to 22.2% over FY25–27. He attributes this to price hikes in soaps, easing palm oil prices, and improving profitability in the international business. The management also projects a 24–27% EBITDA margin in the domestic business over the medium term and expects double-digit EBITDA growth in FY26. In Q4, revenue from Indonesia grew by 5%, while the GUAM region (Africa, the US, and the Middle East) posted 23% organic growth.

Thakur is optimistic as the company’s focus on building new categories, and product innovation have driven high-potential launches like Fab liquid detergent and its entry into pet care. It introduced a pet care brand, Godrej Ninja, in Tamil Nadu, and plans a national rollout in FY26.

The company is also focusing on expanding rural distribution. Through Project VISTAAR, its distribution network grew from 35,000 to 80,000 villages, reaching 6,20,000 rural outlets in FY25. This project had a 100bps impact on EBITDA margin. Analyst projects a 9.7% growth in revenue for FY26-27.

2. Hindustan Petroleum Corp (HPCL):

Emkay retains its ‘Buy’ rating on this refineries & petro-products company with a target price of Rs 500, an upside of 28.6%. HPCL’s refining volume rose 15% YoY to 6.7 million metric tonnes (mmt) in Q4FY25, with strong utilisation at 118%. Domestic sales grew 2.6% even as the overall industry declined 1.8%. For FY25, HPCL gained 0.25% market share, outperforming its other PSU peers. It features in a screener of stocks outperforming their industry price change in the quarter.

HPCL’s capex for FY25 stood at Rs 14,510 crore. Analysts Sabri Hazarika and Arya Patel note that its current major investment cycle is nearing completion. The focus now is on generating returns from this capex before starting the next phase under its 5-year plan of Rs 77,000 crore. The company is also working to maintain a healthy debt-to-equity ratio and ensure that repayments stay manageable. Its capex for FY26-27 is targeted at Rs 13,000–14,000 crore annually, including Rs 4,000 crore in equity, Rs 5,000 crore for refining, and the rest on marketing and other areas.

Hazarika and Patel project HPCL’s revenue and net profit to grow at a CAGR of 2.7% and 6.9%, respectively, over FY26–28.

3. Alembic Pharmaceuticals:

BOB Capital Markets maintains a ‘Buy’ rating on this pharma company with a target price of Rs 1,032, a potential upside of 15.2%. Alembic Pharma’s US sales grew 20% YoY in Q4FY25, driven by higher volumes and four new product launches. The company plans to launch 15 new products in FY26, with analysts expecting 3–4 of them to generate significant revenue.

The company’s research & development (R&D) spending is set to rise to Rs 6,000 crore in FY26 from Rs 5,200 crore in FY25. About 40% of this will go towards peptides, complex injectables, and ophthalmic products (eye-related), while the rest will focus on active pharmaceutical ingredients (APIs) and oral solids. US sales are expected to grow at 13% CAGR over FY26–27.

In FY25, Alembic’s net profit fell 8% YoY due to a 40% jump in finance costs from higher short-term debt. Inventory days increased to 148 from 110 last year, as the company built up stock for multiple delayed product launches and its new Jarod plant in Gujarat. Analyst Foram Parekh expects this to normalise in FY26.

Parekh expects FY26 to outperform FY25 across all key areas, with double-digit growth in domestic sales, new product launches in the US, and stronger growth in the high-margin Rest of the World (RoW) markets.

4. Ami Organics:

IDBI Capital upgrades its rating to 'Buy' on this pharma company with a target price of Rs 1,368, a potential upside of 16.5%. The company's revenue grew 37.2% in Q4FY25, and profit increased by 148.4%, driven by growth in its contract development and manufacturing organization (CDMO) business.

The management aims to achieve 25% revenue growth in FY26, up from the current 23%, driven by new product launches such as lithium-ion battery additives and a new specialty chemical product. The company plans to invest Rs 2,000 crore in FY26 to develop electrolyte additives, a solar power plant, and a pilot plant in Gujarat.

Analyst Jason highlights that the company aims to generate Rs 1,000 crore in revenue from its CDMO business by FY28 to meet growing demand. They expect the company to benefit from new CDMO contracts in H2FY26, driven by the shift from China to India. Analysts project a revenue CAGR of 25-30% for the company over the next two years.

5. APL Apollo Tubes:

Axis Direct maintains a ‘Buy’ rating on the steel tube manufacturer with a target price of Rs 1,920, implying a 11.3% upside. In Q4FY25, the company’s revenue grew 17% YoY to Rs 5,324 crore, driven by higher steel tube prices. Net profit rose 72% to Rs 293 crore, helped by lower energy costs and improved plant efficiency.

Analysts Aditya Welekar and Darsh Solanki expect the company to achieve EBITDA/tonne of Rs 5,000 in FY26, up from Rs 4,864, driven by higher volumes in the value-added products (VAP) portfolio and a reduction in employee cost per tonne from Rs 1,000 to Rs 600 by FY27.

Management aims to increase capacity from 4.5 million tonnes per annum (MTPA) to 6.8 MTPA by FY28 to tap into new markets in East India and raise exports to 10% from the current 6%, with an investment of Rs 1,500 crore. Analysts expect steel tube volumes to grow by 20% annually over the next 2–3 years and return on capital employed (ROCE) to improve to 35% in FY26, up from 25% in FY25.

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

(You can find all analyst picks here)

The Baseline

12 May 2025

Which stocks did superstar investors buy in Q4FY25?

By Divyansh Pokharna

The final quarter of FY25 was marked by volatility. US President Trump’s ‘Liberation Day’ tariffs, announced in April, sparked trade war concerns and added to the uncertainty. India and the US are now actively discussing the first phase of a Bilateral Trade Agreement. US Commerce Secretary Howard Lutnick mentioned that around 7,000 tariff lines could be modified or changed under the deal.

To invest in a changing market, people closely follow superstar investors like RARE Enterprises, Ashish Kacholia, Sunil Singhania, and Vijay Kedia for insights into the market. Their buying and selling activity helps retail investors identify promising sectors and stocks. We take a look at their top buys in Q4FY25.

(You can now invest in shadow superstar baskets available on Starfolio, which are updated and rebalanced in line with Trendlyne's superstar portfolios).

In Q4, most superstar investors stayed cautious as markets turned volatile, making fewer additions and more stake sales, continuing the trend from the December quarter. The chart below shows changes in their current public portfolio net worth.

Superstar net worth includes current holding changes, as well as new buys and sells.

Each superstar investor's portfolio reflects their unique investing style and sector preferences. The chart below highlights the dominant sectors in each investor’s public portfolio.

Sector preferences vary among superstar investors – RARE Enterprises leans towards the textiles, apparels & accessories sector, while Ashish Kacholia favours general industrials. Sunil Singhania focuses on the metals & mining sector, and Vijay Kedia’s preferred industry is automobiles & auto components. Dolly Khanna leans more towards the oil & gas industry, and Porinju Veliyath’s top sector is software & services.

Ashish Kacholia made the highest number of new investments in Q4, adding six new companies to his portfolio. His new picks lead the list of best-performing stocks over the past quarter. One of Dolly Khanna’s stocks also features in this list. Here’s a look at the top-performing stocks held by superstar investors.

Kacholia’s Qualitek Labs topped the list with a 11.3% rise over the past quarter, followed by Infinium Pharmachem. Among Dolly Khanna’s holdings, Polyplex Corp gained 8.8% during the same period.

Porinju’s M M Rubber Company and Kacholia’s Z-Tech have dipped slightly during the quarter, with both falling around 1.5%. Meanwhile, GHCL and Concord Control declined by 7.2% and 8.1%, respectively.

RARE Enterprises adds a minor stake in a banking stock

Rakesh Jhunjhunwala’s portfolio, currently managed by Rekha Jhunjhunwala and RARE Enterprises, has risen by 16.2% to Rs 57,245 crore as of May 12. During Q4, RARE Enterprises only made a minor stake increase in a banking stock.

RARE increased a minor 0.1% stake in Federal Bank in the March quarter. The portfolio now holds a 1.5% stake in this banking stock. Over the past year, the bank’s share price has increased by 21.6%, outperforming its industry by 5.6% points. It also has an affordable valuation score of 66.5.

RARE also bought minor stakes in Canara Bank and Titan during the quarter, taking its holding to 1.5% and 5.2% in the banking and gems & jewellery companies, respectively.

Ashish Kacholia adds six new companies in Q4

Ashish Kacholia’s net worth has declined by 21.3% to Rs 2,506.8 crore as of May 12. During the quarter, the ace investor added six new companies to his portfolio and raised stake in one firm.

Kacholia’s biggest buy during the December quarter was Qualitek Labs, a consulting services company. The investor bought a 5.1% stake in the company. The company’s share price has increased by 92.8% over the past year, outperforming its industry by 98.2% points.

During Q4, he acquired a 4.6% stake in Infinium Pharmachem. Over the past year, the pharma company has risen by 31.6%, outperforming its industry by 11.5% points. Kacholia also added construction & engineering company Z-Tech (India) by buying a 3.5% stake. The firm has surged 405.5% in the past year, and outperformed its industry by 395.5% points.

The marquee investor added Thomas Scott, a textiles company, in the March quarter, buying 2.4%. The company has a high durability score of 60. Kacholia’s portfolio also revealed a 1.9% stake in wires & cables maker Quadrant Future Tek. The company debuted on the bourses on January 14, 2025, with its IPO oversubscribed by 186.7x.

Kacholia also added a 1.2% stake in Concord Control to his portfolio in Q4. The electronic components manufacturer has risen by 74.4% over the past year. It features in a screener of companies with low debt.

He increased his stake in Tanfac Industries by 0.4%, bringing his holding to 1.6%. Tanfac has a high Durability score of 75 and ranks high on Trendlyne’s checklist with a score of 65.2%.

Sunil Singhania’s Abakkus Fund discloses stake in a recently listed company

Sunil Singhania’s Abakkus Fund saw its net worth fall by 21.6% to Rs 2,339.7 crore as of May 6. The fund disclosed a 1.3% stake in a water management solutions company during the March quarter.

Denta Water and Infra Solutions debuted on the bourses on January 29, 2025, with its IPO oversubscribed by 221.7 times. The stock has risen marginally by 0.3% over the quarter. The company has strong financials, with revenue and net profit rising by 13.7% and 127.3%, respectively, in Q3FY25. It appears in a screener of stocks showing rising quarterly net profit and profit margin (YoY).

The fund also marginally increased its stake in Technocraft Industries and HG Infra Engineering, now holding 2.4% and 1.4% in these companies, respectively.

Vijay Kedia makes no new buys in Q4

Vijay Kedia's net worth has fallen by 31.2%, reaching Rs 1,347.2 crore as of May 12. He has remained relatively quiet in recent months, making no new purchases or increasing stakes during the quarter. However, he has sold stakes in a few companies.

Dolly Khanna adds two new companies in Q4, raises stakes in eight

Dolly Khanna's net worth increased by 11%, reaching Rs 533.7 crore as of May 6. She publicly holds 17 companies and continued to expand her portfolio in Q4 by adding two new companies and increasing stakes in eight others. Her new investments include a 1.2% stake in Polyplex Corp, a packaging films maker, and a 1% stake in GHCL, a commodity chemicals manufacturer.

Both companies have high Valuation scores, indicating they are attractively priced. Over the past year, Polyplex Corp's share price has risen by 45.2%, while GHCL’s increased by 24%.

During Q4FY25, Khanna also bought a 1% stake in Som Distilleries & Breweries, raising her holding to 2.4%. She increased her stake in Prakash Industries by 0.8%, now holding 2.1%. Both companies have high Trendlyne checklist scores of over 60.

Additionally, Khanna added a 0.4% stake each in Prakash Pipes, Mangalore Chemicals & Fertilizers, and 20 Microns. Her holdings in these companies are now 4.1%, 2.2%, and 1.7%, respectively. All three have outperformed their industry price change over the last quarter.

The ace investor also raised her stake by 0.2% in Stove Kraft and 0.1% in KCP Sugar during Q4. Her current stakes in these companies are 1.3% and 19%, respectively. Khanna increased her stake slightly in Savera Industries as well.

Porinju Veliyath adds two new companies to his portfolio in Q4

Porinju Veliyath's net worth decreased by 40.4%, reaching Rs 176.8 crore. During the March quarter, he added Apollo Sindoori Hotels to his portfolio, acquiring a 1.7% stake in the hotels company. The company’s share price has fallen by 24.1% over the past year, underperforming its industry by 37%. However, it has a high Durability score of 65.

Veliyath also bought a 1% stake in M M Rubber Company, a rubber products manufacturer. The company features in a screener of stocks with zero promoter pledges.

Additionally, Veliyath acquired a 0.1% stake in IT software company Aurum Proptech, increasing his holding to 6%. The company's share price has risen by 22.7% in the past year, outperforming its industry by 12.3%.

The Baseline

09 May 2025

Five Interesting Stocks Today - May 09, 2025

By Trendlyne Analysis

1. Coforge:

This IT consulting & software firm jumped 5.2% over the past week after announcing its Q4 results. The rise was also driven by CEO Sudhir Singh expressing confidence in achieving the company’s $2 billion revenue target by FY27, backed by record-high deal wins in FY25. He highlighted that the executable order book for the next 12 months stands at $1.5 billion, up 48% YoY. Singh noted that near-term macroeconomic challenges are not expected to pose a major risk.

The surge in Coforge’s order book is largely driven by a major deal with Sabre Corp, a travel technology company. On March 4, Coforge announced a 13-year, $1.6 billion contract with Sabre, which translates to about $120 million in annual revenue. With this deal making up nearly half of the order book, there is a potential risk of margin pressure, as Sabre may have leverage over pricing. However, the management is confident that it will not hurt margins and aims for an EBITDA margin of around 18% by FY27, up from the current 16.6%.

In Q4, the company’s EBITDA margin rose by 108 bps QoQ to 18.7%. Revenue grew 1.9% QoQ to Rs 3,441 crore, but missed Forecaster estimates by 2.5%. The growth was supported by strong performance in the banking, financial services and insurance (BFSI), travel, and overseas government segments. Speaking about the travel vertical, Singh said. “In North America and Europe, airlines are being cautious, but leisure travel is slowly picking up. Travel demand is strong in Asia, the Middle East, and Africa, so FY26 looks promising for us.”

During the quarter, Coforge acquired a data and cloud asset in the US, generating $6 million in quarterly revenue, and a ServiceNow asset in Australia, contributing $2 million per quarter. This helped offset the revenue loss from the recently divested AdvantageGo business, an insurance software unit. The company sold AdvantageGo for $53.5 million on April 30 as part of a broader strategic restructuring.

Motilal Oswal has given Coforge a ‘Buy’ rating, calling it their top pick among tier-II IT players. The brokerage believes a strong executable order book and consistent client spending across sectors will support the company’s growth. It also expects Coforge’s EBITDA margin to expand by 100–120 bps over the next 12–18 months.

2. R R Kabel:

Thiswires and cables companysurged 18% over the past week after announcing its Q4results. In Q4, the company reported a revenue growth of 26% YoY, surpassingForecaster estimates by 8%. Net profit gained 64%, significantly exceeding expectations, led by strong volume gains and price hikes.

RR Kabel shares rallied as this performance came after two quarters of relatively subdued demand, impacted by channel destocking and volatility in raw material prices.

The businessgets a majority of its revenue from wires and cables (W&C), while 12% comes from fast moving electrical goods (FMEG). Losses in the FMEG division have gone down by half in Q4, and the company expects this segment to achieve EBITDA breakeven by FY26. The company appears in ascreener of stocks with best results last week in terms of revenue and net profit growth on a YoY basis.

RR Kabel’s management is confident of outpacing the industry with a targeted CAGR of 18%, as the W&C industry is projected to grow at a CAGR of 15%. To support this ambition, the company invested Rs 370 crore in capex this year, which is 95% higher compared to last year.

Looking ahead, MD Shreegopal Kabrasays, “We have already begun executing our Rs 1,200 crore capex plan for FY26-28, which is primarily aimed at expanding cable capacity to support a 15-20% volume growth and improve margin.” Kabra aims to achieve a topline growth of Rs 4,500 crore with this investment.

Motilal Oswalmaintains a ‘Neutral’ rating on the stock. It sees volatility in raw material prices and rising competition as key challenges. Analysts also expect the company’s net debt to increase to Rs 840 crore by FY27 from Rs 110 crore as of FY25, driven by higher capex.

3. Sona BLW Precision Forgings:

Thisauto parts manufacturer rose 3.3% on May 2 after announcing itsQ4FY25 results. The company's net profit grew 10.4% YoY to Rs 164.1 crore, beating Forecaster estimates by 8.5%. The growth wasdriven by higher other income from interest earned on surplusQIP funds.

However, during the quarter, the company’s operating revenue dropped 2.3% YoYdue to uncertainty over US tariffs, weaker demand in the US, intense competition from Chinese OEMs (Original Equipment Manufacturers) in the EU, and the transition of a global EV customer to a new model.

Vivek Vikram Singh, MD & Group CEO of the company,said, “Despite a temporary revenue drop due to model transition, we closed the quarter with record profitability. Our Battery Electric Vehicle (BEV) business is growing rapidly, and with new product launches and orders, our order book is at an all-time high.” The company expects revenue growth to recover in H1FY26 and plans to diversify towards Chinese and other Asian OEMs as the US and EU markets remain weak.

In FY25, BEVscontributed 36% of the company's total revenue, an increase from 29% in FY24. BEV revenue grew by 38% YoY in FY25. The segment also accounts for 77% of the total order book of Rs 24,200 crore. North America remains the largest market, contributing roughly 40% of sales.

About 3% of revenue faces risk from US tariffs. Managementnoted that the indirect effects of the tariffs could slow down customer demand and disrupt supply chains in the short term. He also highlighted China's recent export restrictions on seven rare earth elements and associated magnets, which could strain electric vehicle (EV) component sourcing. To mitigate this, Sona BLW isdeveloping magnetless motor technology and other non-rare-earth technologies.

The company is expanding its product portfolio with new products such as traction motors, controllers, belt starter generators (BSG), and sensors. It entered the railway equipment business byacquiring Escorts Kubota’s railway division for Rs 1,600 crore. The company is also working on high-voltage traction motors for heavy vehicles and exploring robotics applications for driveline components.

Post results, Motilal Oswalreiterated its ‘Neutral’ rating. The brokerage expects net sales to grow at an 11.7% CAGR and net profit at an 11.5% CAGR over FY26-27, driven by BEV momentum and new business wins.

4. CCL Products India:

This tea & coffee company recorded its best single-day gain in eight months, rising 15.9% on May 6, following the announcement of its Q4FY25 and full year results on May 5. The company reported a 56.2% YoY surge in net profit for Q4FY25, reaching Rs 101.9 crore, driven by an improved product mix and expanding margins. Its revenue rose by 14.9%. The stock appears in a screener featuring strong momentum stocks.

The company beat Trendlyne’s forecaster, Q4FY25 net profit estimate by 55.3% and the revenue estimate by 32.3%. Despite volatility in coffee prices, the company’s gross margins rose by 133 basis points to 44.4%, while EBITDA margins expanded by 328 basis points YoY to 19.5%. Its geographical advantage enabled it to strengthen its presence in international markets, increase market share, and secure new business opportunities. The company also plans to further invest in the UK and US markets.

Challa Srishant, Managing Director of CCL Products, has set a target of 40% volume growth in the domestic market by FY26. The company also aims to increase its global market share from 7% to 10%. Mr. Srishant expects EBITDA/kg to stay steady at approximately Rs 120 per kg and remains confident in meeting volume targets, despite shorter contract periods. He highlighted the completion of the company’s subsidiary (Ngon Coffee) manufacturing facility in Vietnam and noted that, “We are expanding in China, Taiwan, Middle East, and African markets. These are economies we foresee will be driving coffee consumption in the coming decades.”

The company's working capital debt rose to Rs 1,815 crore in FY25, mainly due to high coffee prices and long-term loans taken for capacity expansion. On the debt levels, Srishant said, “With raw material prices now falling 10%, there could be a reduction in working capital loans. Over the next 3-4 years, debt levels will start sliding back.” But he didn’t go into specifics.

Axis Securities has maintained a ‘Buy’ rating on CCL, citing the company’s consistent performance despite volatility in coffee prices. The brokerage highlighted the company’s plans of expanding capacity in value-added products such as freeze-dried coffee (FDC) and small packs in Vietnam. It has increased its FY26 & FY27 PAT estimates by 13% and 14%, respectively.

5. Avenue Supermarts (DMart):

This department stores chain has declined by 5.4% over the past week following the announcement of its Q4FY25 results. Avenue Supermarts’ net profit declined 2.2% YoY to Rs 550.9 crore, and missed Trendlyne’s Forecaster estimates by 5.1%. The dip in profit was due to higher raw materials, employee benefits and finance costs.

During the quarter, revenue increased 16.9% YoY to Rs 14,896.9 crore driven by new store additions. DMart opened 28 new stores, taking its total count to 415. For the full year, the company added 50 stores, up 22% compared to the previous year.

DMart’s like-for-like (LFL) sales fell to 8.1% in Q4FY25 from 10.3% a year ago. The management highlighted that non-metro cities outperformed metros. Quick-commerce's rising popularity has been impacting these markets, which account for ~47% of DMart’s revenue. Despite the perception of D-Mart’s customer as being highly price conscious, quick commerce players have been making inroads.

Neville Noronha, CEO & Managing Director, said, “The rise of Q-commerce is impacting us, particularly in metro stores with high foot traffic and fast inventory turnover”. He added that increased competition in the FMCG space, rising employee costs, and higher investments in service levels have dragged down margins. The company’s EBITDA margins declined 100 bps YoY to 6.4% in the March quarter.

DMart is known for offering the lowest prices on branded fast-moving consumer goods, while Q-commerce players’ advantages are discounted pricing and 10-minute delivery. The company has been offering higher discounts and increasing its delivery services through DMart Ready. It expanded its presence to 25 cities during FY25. Noronha highlighted, “Home delivery is gaining traction in metros, however, losses from the format will likely continue in the near term”.

Following the company’s earnings announcement, Axis Direct reiterated its ‘Buy’ rating with a Rs 4,770 target price. The brokerage highlights DMart’s focus on boosting store productivity, improving profits, and reviving its general merchandise & apparel segment.

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

The Baseline

09 May 2025

Superstar investor portfolios take a hit from market volatility | Screener: Promoters reducing their stakes

By Tejas MD

A diet that includes five cans of Coca Cola every day, potato chips and weekly meals at McDonald's. No exercise. This is the secret to Warren Buffett's longevity (he is now 94) and 75-year career.

The famous Oracle of Omaha is retiring with a legacy that is difficult to imitate — whether in terms of his food habits, his success, or in the returns he generated at Berkshire Hathaway.

Buffett's timeless quote,“Our favourite holding period is forever”, has inspired generations of investors. Retail investors look up to superstar investors like Buffett, hoping to figure out their high-return strategies.

But investing strategies vary. Some of these investors stick to Buffett’s mantra of patience. Others move fast, reshuffling their portfolios to ride out the storm. So, how are India’s superstar investors navigating the turbulence of 2025? Who’s holding firm? Who’s making bold moves? And how has their net worth changed in the recent market volatility?

In this week’s Anlayticks,

Portfolio pain: Superstar investors see their net worth take a hit in Q4FY25
Screener: Promoters decreasing their shareholding QoQ

Market volatility roils superstar investor portfolios in Q4

The last quarter of the financial year ending March 2025 was volatile, with benchmark indices plunging 16%+ from their record highs. Trump’s ‘Liberation Day’ rattled markets in April with tariff uncertainty. Even superstar investors haven't been spared, with their portfolios taking a hit.

Major superstar investors see their net worth fall in the March qtr (Q4FY25)

Rakesh Jhunjhunwala & Associates’ public portfolio (now managed by Rare Enterprises), saw a rise in net worth in the March quarter, mainly due to a Rs 14,953 crore fund infusion into a newly listed company, Inventurus Knowledge.

Other top investor portfolios saw their net worth drop. Vijay Kedia took a big hit, with his top holdings, Atul Auto and TAC Infosec, falling 16% and 30% over the past quarter. These two stocks make up over 30% of his public portfolio. The struggle highlights the dangers of a volatile market, that even the best in the business can’t avoid.

Most expert investors sat tight during this period, or cautiously trimmed their stakes. But Ashish Kacholia took a different route, going for an aggressive reshuffle. In Q4FY25, he cut his holdings in 10 companies and added eight new names.

Breaking the trend: Ashish Kacholia snaps up new stocks in a volatile market

Interestingly, this mirrors Mukul Agrawal’s strategy from the previous quarter, when he picked up eight new stocks while cutting his stake in 12 companies. However, Agrawal went into sell mode this quarter, trimming his position in 13 stocks while buying a new stake in just one company.

New stakes are in recently listed, expensive companies

Some top investors acquired new stakes in 10 companies in Q4,all in the small-cap space. Ashish Kaholia contributed eight of these new additions.

New Buys: Kacholia picks up expensive, newly listed stocks

One sector in particular, is in the spotlight — commercial services & supplies, which features prominently across these portfolio moves.

Two clear patterns stand out from this list. First, seven of the 10 new buys are fresh listings from 2024-25. Second, they come with expensive valuations, as flagged by Trendlyne’s valuation scores.

Superstar investors pick up new stakes in 2024-25 newcomers

Only one of the seven recently listed companies outperformed the Nifty50 in the past quarter, Qualitek Labs.

Superstar investors sell stakes in underperforming companies

Ten stocks exited superstar portfolios in the past quarter. Barring Ceat, all other companies have underperformed the Nifty50 in the past quarter.

These exits spanned sectors from transportation to banking and finance. The biggest loser was Quick Heal Tech, a software and services firm that Mukul Agrawal chose to offload.

Fundamentally strong stocks feature in superstar investors’ Sell list

Interestingly, even fundamentally strong stocks were cut out, as price underperformance forced superstar investors to exit in Q4.

Among long-term winners for superstars, Vijay Kedia’s Neuland Labs shines

Neuland Labs, the pharma player, stands out as the best-performing long-term bet for both Vijay Kedia and Mukul Agrawal. However, Kedia has outpaced Agrawal in returns, thanks to his timely entry in 2019 when the stock was trading at lower levels.

Best long-term holdings for superstars: Kedia's Neuland Labs tops the list

Akash Bhanshali’s Gujarat Fluorochemicals (30% of total holding value), on the other hand, has lagged since they bought the stock. However, Bhanshali's net worth has almost tripled in the past two years due to high performance in their other holdings and fresh buys in new stocks.

Screener: Promoters decreasing their shareholding QoQ

Banking & finance stocks see QoQ drop in promoter holdings in Q4FY25

2025 began with heightened volatility across global markets, triggered by President Donald Trump's new import tariffs. As benchmark indices slipped into correction territory, promoters of several Indian companies reduced their holdings. This screener highlights stocks where promoters cut their stakes quarter-on-quarter in Q4 FY25.

The screener is dominated by stocks from the banking & finance, pharmaceuticals & biotechnology, FMCG, software & services, and consumer durables sectors. Major stocks that feature in the screener are AWL Agri Business, JB Chemicals & Pharmaceuticals, UCO Bank, Central Bank of India, Hitachi Energy, Aditya Birla Fashion, Home First Finance, and Indian Overseas Bank.

JB Chemicals shows up in the screener after its promoter cut their stake by 5.8 percentage points to 47.8% in Q4FY25. Its stock price declined 9.9% over the past quarter. This pharmaceutical company’s promoter, Tau Investment Holdings, sold 89.8 lakh shares (a 5.8% stake) for Rs 1,459.8 crore. A mutual fund, Kotak Emerging Equity Scheme (bought a 1.4% stake), and a foreign institutional investor (FII), Smallcap World Fund, Inc (bought a 1.1% stake), picked up the stake sold by the promoters.

Public sector undertaking (PSU) banks like UCO Bank, Central Bank of India, and Indian Overseas Bank saw a 4.4 percentage points, 3.8 percentage points, and 1.8 percentage points reduction in promoter holding in Q4FY25. The Government plans to reduce its holdings in these banks to below 75%, with an official stating, “This will be done to comply with the Securities and Exchange Board of India’s (Sebi’s) minimum public-shareholding norms. While market conditions will be considered, the government plans to use both the offer for sale (OFS) and qualified institutional placement (QIP) routes." FIIs and mutual funds picked up stakes in UCO Bank and Central Bank of India, while retail investors also picked up stakes in Indian Overseas Bank.

You can find more screeners here.

The Baseline

07 May 2025

Chart of the week: India’s changing consumer demand, policy support is driving domestic market growth

By Omkar Chitnis

A richer, more urban and brand-conscious consumer is rapidly changing the Indian market.

Over the past decade, India’s private consumption has nearly doubled, rising from $1 trillion in 2013 to $2.1 trillion in 2024. This surge in spending is fueling demand across key sectors such as automotive, FMCG, and metals. The shift is happening in the backdrop of a weak global economy, where political upheaval, tariffs and falling profits have forced Indian companies to refocus on the domestic market.

In response, Indian companies are ramping up investments to strengthen their domestic footprint. Government initiatives like ‘Vocal for Local’ have accelerated this shift, encouraging production within India, and boosting local manufacturing.

Dr. Rumki Majumdar, Economist at Deloitte India, notes, “Domestic consumption will remain the cornerstone of India’s economic growth, with both rural and urban demand playing key roles. Improved agricultural incomes, subsidies, government employment initiatives, and services sector growth will support consumption spending.”

This shift is pushing companies to adjust their capacity and investments toward the domestic market, rather than exports.

In this edition of the Chart of the Week, we analyze major Indian companies that shifted their focus from international markets to domestic between FY15 and FY25.

A growing middle class, higher disposable income, and PLI schemes have boosted domestic automobile sales for Bajaj Auto, Mahindra & Mahindra, and Tata Motors, helping them expand their market share within India.

Government initiatives like Make in India and PM Gati Shakti have nudged manufacturing companies such as Tata Steel, JSW Steel, and Hindalco Industries into increasing domestic production, by shielding them from anti-dumping duties.

Rising rural consumption and growing purchasing power have also led FMCG companies Dabur, Marico, and Tata Consumer Products to strengthen their domestic supply chains and product offerings. The growth in these sectors has attracted over $709.8 billion in foreign direct investment between April 2014 and March 2024.

Richer, urban Indians are buying more vehicles, boosting domestic auto sales growth

India’s automobile sector, valued at $122.5 billion in FY24, ranks fourth globally, up from $74 billion in FY15. It has grown at a 6.4% CAGR and contributes 7.1% to GDP.

Two-wheelers lead with a 75.3% market share, followed by passenger vehicles at 17.6% of total automobile sales. Rising incomes, urbanization, growing EV demand, and government initiatives are driving automobile sector growth.

Bajaj Auto, the fourth-largest two-wheeler manufacturer by market share, operates in 70 countries. In FY25, international revenue dropped by 13.2 percentage points over the past decade to 33%, while domestic revenue rose by 13 percentage points to 67%. Impacted by import restrictions, weaker margins, and currency fluctuations. Opportunities in the Indian market also made Bajaj turn towards the domestic market.

To strengthen its position in the domestic market, Bajaj Auto launched electric scooters and motorcycles priced under Rs 1.1 lakh for rural and semi-urban areas. It also entered the premium segment with Triumph Motorcycles and expanded its touchpoints to 4,000 locations. Strong growth in domestic demand drove revenue to a 7.6% CAGR from Rs 22,198 crore in FY15 to Rs 46,306 crore in FY24. This growth boosted Bajaj Auto’s share price by 285.9% over the same period.

Bajaj Auto’s domestic EV business is ramping up fast. Rajiv Bajaj, Managing Director of Bajaj Auto, said, “With the rapid launch of new products in the coming months, we aim to achieve an annual sales rate of half a million electric vehicles by the end of FY26. Our expanded portfolio, including the new Chetak electric scooters and electric three-wheelers, will play a key role here.”

Mahindra & Mahindra generates 72.5% of its revenue from the automotive segment. Over the past decade, the company reduced its reliance on international markets due to legal disputes, operational issues, and weak profitability across its U.S. electric two-wheeler business, South Korean EV business, and in Bangladesh. Instead, M&M increased its focus on the domestic market, raising its revenue share from 68% in FY15 to 89% in FY25.

M&M expanded its domestic product lineup by introducing new SUV models, including the Thar, XUV700, and Scorpio. This expansion drove its Sport Utility Vehicle (SUV) market share to 22.5% in FY25, and profit grew fourfold from Rs 3,137.5 crore in FY15 to Rs 12,929.1 crore in FY25.

Policy support fuels surge in construction and manufacturing sectors

The steel industry dominates India’s metal sector, contributing 53% of total production. Output grew from 90 million tonnes in 2015 to 150 million tonnes (MT) by 2025. Sectors such as construction, automotive, and defense are driving consumption. Initiatives, including PM Gati Shakti and National Steel Policy, are reducing India's reliance on steel imports by enhancing logistics and increasing domestic production.

Tata Steel, JSW Steel, Hindalco Industries, and Jindal Steel & Power are expanding domestic capacities to capitalize on this growth.

Tata Steel, one of India’s largest steel producers, increased its focus on domestic operations, raising its domestic revenue share from 32% in FY15 to 75% in FY25. The company reduced its dependence on international markets, in the UK and the Netherlands, due to high energy costs, competition from cheap imports, and strict regulations at its plants.

JSW Steel also reduced its international exposure from 17% of total revenue in FY15 to 8% in FY25 due to mounting losses at its U.S. and Italy plants caused by high costs and labor issues. These challenges led to a 30% drop in exports in FY19, leading the company to shift its focus towards the domestic market. To support domestic growth and capacity targets, Jayant Acharya, Joint MD & CEO of JSW Steel, said,“For FY26, we are targeting 15 million tonnes of production from our Karnataka mines. Our new mining projects in Goa and Odisha will further boost our growth trajectory.” The companyaims to reach 50 million tonnes per annum (MTPA) production capacity by FY31, up from 28 MTPA.

Shifting consumer habits drive growth in India’s FMCG sector

The Indian FMCG market is valued at $245.39 billion in 2024 and is expected to grow at a CAGR of 27.9% by 2030. Rising disposable incomes, urbanization, and the expansion of e-commerce and Government initiatives, along with tax reductions, are driving the growth and supporting local manufacturing.

Shifting consumer preferences for premium, health-conscious, and sustainable products are driving growth for FMCG companies, including Tata Consumer, Godrej Consumer Products, Dabur, Hindustan Unilever, and Marico. This focus on quality and wellness is improving sales and market share.

Tata Consumer Products (TCPL), which operates in 40 countries, increased its domestic revenue share from 38% in FY15 to 74% in FY25 by reducing its international presence. The company restructured its operations in Russia, China, and Sri Lanka due to intense competition and weak margins.

In India, TCPL expanded its portfolio beyond tea and beverages into food products such as snacks, pulses, spices, and packaged foods. The company acquired and integrated its brands in the food and wellness sectors, growing its retail outlets' reach to 4 million in FY25. These initiatives doubled revenue in the past 10 years, and EBITDA margins increased from 10.4% to 15%.

Building on this momentum, Sunil D'Souza, MD & CEO of Tata Consumer Products, said, “We are targeting double-digit revenue growth across all businesses in FY26, with a focus on improving margins through price adjustments and the normalization of tea prices.”

Dabur, operating in over 120 countries, faced regulatory scrutiny and tighter import screening in the UK, and currency volatility, particularly in Egypt and North Africa, impacted its international business, squeezing profitability and revenue growth.

Over time, the company shifted its focus from international revenue to the Indian market, capitalizing on the rising demand for natural, herbal, and Ayurvedic products, particularly in oral care and honey. Dabur expanded its reach to 122,000 rural areas and grew its product offerings from 1000 to 2000 Stock Keeping Units (SKUs) between FY15 and FY25.

The Baseline

06 May 2025

Five stocks to buy from analysts this week - May 06, 2025

By Omkar Chitnis

1. IDFC First Bank:

BOB Capital Markets maintains a ‘Buy’ rating on this bank with a higher target price of Rs 79, an upside of 20.6%. In Q4FY25, the bank’s net interest margins (NIMs) dropped 58 basis points YoY to 6%, because of a decline in its microfinance (MFI) loan portfolio by 28%. MFI loans now make up just 4% of the bank’s total loan book, compared to 6.6% a year ago. The company's management also expects a slight impact on NIMs in FY26 due to possible interest rate cuts.

On April 17, IDFC Bank approved a preferential equity capital raise of Rs 7,500 crore by issuing compulsorily convertible preference shares (CCPS) at Rs 60 per share. Analysts Niraj Jalan and Vijiya Rao believe this will boost the bank’s core capital ratio (which shows how well a bank can absorb losses) to 16.5%, up from 13.2% as of March 2025. This added capital is expected to support future growth and improve cost efficiency.

Jalan and Rao believe that improved operating efficiency and asset quality will lift the return on assets (RoA) to 0.9–1.3% by FY26–27, from 0.5% in FY25.

2. Eternal (Zomato):

Emkay Global initiates a ‘Buy’ rating on this food delivery company with a target price of Rs 290, indicating a potential upside of 24.6% %. In Q4FY25, the company’s revenue rose 63.8% YoY to Rs 58,330 crore, owing to improvements in its quick commerce (QC) and Hyperpure segments.

Eternal's QC unit Blinkit's Gross Order Value (GOV) grew 20% QoQ. However, Blinkit’s EBITDA margin dropped by 60 bps to -1.9% QoQ in Q4, driven by higher costs from new store openings and customer acquisition.

Analysts highlight that management is prioritizing market share and growth over immediate profits due to heightened competition. Quick Commerce has become crowded with both new startups and established players like BigBasket fighting for market share. They expect the stock price to remain range-bound in the near term due to increased competitive intensity in QC and planned investments in the going-out (dining out, events, and ticketing) business.

Analysts note that in Q4, the company added 294 dark stores, bringing its total to 1,301. They highlight that management plans to open 2,000 dark stores by December 2025, and maintain an EBITDA margin of 4–5% of GOV in quick commerce. Analysts also project Eternal’s EBITDA margin to improve to 7.5% by FY27, up from 3.1% in FY25.

3. Dalmia Bharat:

Sharekhan retains its ‘Buy’ rating on this cement manufacturer with a target price of Rs 2,300, indicating an upside potential of 17.8%. The company’s Q4FY25 revenue fell 5% YoY to Rs 4,091 crore due to lower cement volumes. But net profit rose 38% to Rs 435 crore, helped by reduced fuel costs and a higher share of renewable energy.

The company’s management aims to reduce the cost of cement manufacturing to an EBITDA/ tonne of Rs 150–200 over the next two years, down from the current Rs 820. They plan to achieve half of this target by FY26 through lower input costs and a doubling of renewable power capacity to 595 MW. Analysts are optimistic that the company will balance volume growth and profitability once it reduces manufacturing costs.

In FY25, Dalmia Bharat expanded its cement capacity by 2.9 metric tonnes (mt), bringing the total to 49.5 mt. It plans to invest Rs 3,520 crore to establish a clinker unit (partially processed cement unit) and a 6 mt grinding unit in Karnataka and Maharashtra. Analysts expect cement volumes to grow 7–8% in FY26, driven by increased government infrastructure spending. They also expect the company to receive Rs 400 crore in subsidies for setting up cement plants in Northeast India.

4. Bandhan Bank:

Anand Rathi reiterates its ‘Buy’ rating on this bank with a target price of Rs 207, indicating an upside of 31.5%. In Q4FY25, Bandhan Bank's slippages (bad loans) were up 8% QoQ to Rs 1,750 crore, or 5.5% of its total loans. Analysts Yuvraj Choudhary, Kaitav Shah and Subhanshi Rathi expect slippages to stay high for a few more quarters but ease later, as most of the older loans have already been recognised and new loan stress is limited.

The bank has been dealing with stress in its emerging enterprises banking (EEB) loan book (loans to small and growing businesses) for the past 17 quarters. However, the analysts believe future stress will likely be lower than the industry average. In Q4, the bank’s collection efficiency in the EEB book was 97.8%, slightly up from 97.4% in Q3. Choudhary, Shah, and Rathi expect gross NPAs to drop below 4% by FY26, from 4.7% during the quarter.

5. Ambuja Cement:

Axis Direct initiates a ‘Buy’ rating on this cement manufacturer with a target price of Rs 655, indicating an upside potential of 22.4%. Analysts Uttam Srimal and Shikha Doshi note that the company is targeting a cement capacity of 140 MTPA by FY28, up from its current capacity of 100 MTPA. They expect volume and revenue to grow at a CAGR of 11% and 10%, respectively, over FY25–FY27.

Shrimal and Doshi write that the company has reduced costs by Rs 150 per tonne through operational improvements. They highlight that the management aims to achieve additional savings of Rs 300–350 per tonne by FY28 by lowering logistics costs, increasing the use of renewable energy, and expanding the share of blended cement.

Management is aiming to optimize cost savings and increase operational efficiency by consolidating their acquired assets—Penna, Sanghi, and Orient Cements—across the companies. Analysts expect that synergies between the companies will improve EBITDA margins to 21% by FY27, up from 17% in FY25.

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

(You can find all analyst picks here)

The Baseline

02 May 2025

Five Interesting Stocks Today - May 02, 2025

By Trendlyne Analysis

1. TVS Motor Company:

This two-wheeler manufacturer rose 1.6% on May 2 after reporting a 16% YoY increase in total sales for April 2025. The company sold 3.8 lakh vehicles during the month, driven by a 59% jump in electric vehicle (EV) sales. Exports grew 45%, while three-wheeler sales rose 50% YoY.

In Q4FY25, TVS Motor's electric scooter sales rose 55% YoY. The company’s revenue jumped 17.5%, supported by a 16% rise in volumes to 12.2 lakh units. Net profit saw an impressive spike of 75% during the quarter. Both revenue and net profit beat Trendlyne Forecaster estimates.

The company benefited from raw material costs coming down to about 69.3% of sales, compared to 72.8% in Q4FY24. It reported an EBITDA margin of 14% in Q4, which includes the full-year PLI benefit booked during the quarter. Export growth was strong in Latin America and Asia, while African markets were slower due to inflation and currency issues. TVS Motor’s overall market share increased by 160 bps YoY to 20.4%.

The company’s investments rose to around Rs 4,000 crore in FY25, up from Rs 2,450 crore in FY24. Of this, about Rs 500 crore went to TVS Credit Services, its non-banking finance subsidiary, which added over 40 lakh new customers during the year, taking the total to 1.9 crore. A significant portion also went to Norton, its premium motorcycle brand, where new product launches are expected by Q4FY26.

Regarding the demand outlook, CEO K N Radhakrishnan said that the company expects domestic two-wheeler demand in FY26 to remain steady, similar to FY25, driven by the ongoing need for vehicle replacements. He added, “A 50 bps cut in the repo rate, leading to lower EMIs, more wedding dates, and a normal monsoon will drive positive sentiment. May and June are expected to see a boost due to the wedding season.”

Post results, Anand Rathi has assigned a ‘Buy’ rating. The brokerage expects 7% CAGR in domestic 2W volumes from FY25-27, driven by rising EV adoption, replacement demand, and easy access to finance. They believe investments in TVS Credit Services, Norton, e-cycles, and TVS Digital will materialize over the next 1-2 years.

2. CEAT:

This tyre manufacturer surged 9.5% over the past week following the announcement of its annual result. In Q4, the company reported 14.4% YoY revenue growth, surpassing Forecaster estimates by 3%, driven by both volume and price increases. However, net profit came 8% lower compared to the same period last year and missed estimates by 12% due to elevated rubber prices.

CEAT gets the majority of its revenue from the replacement market, while 28% comes from OEMs and 19% from exports. Within its portfolio, tyres for trucks, buses, and two- and three-wheelers account for 60% of total revenue. CEO Arnab Banerjee expects falling crude prices to help offset the impact of high rubber costs and projects gross margins to improve to over 40%, up from 37.5% in Q4.

Banerjee also highlighted that rural demand outpaced urban by 4–5% in Q4, a trend he expects to continue in the current quarter. Over the long term, the company anticipates the domestic tyre industry to grow at a CAGR of 6–7%, while exports are projected to grow at 10–11%.

Integration of Camso, an off-road tyre and tracks company that CEAT acquired from Michelin in December last year, is on track for completion by Q2FY26. This move is likely to increase export revenue to 25%, up from the current 19%. Notably, about 30% of Camso’s exports to the US originate from Sri Lanka, which faces a 44% tariff. However, management notes that tyre tracks, which constitute nearly 50% of US-bound exports, attract only a 4% duty.

Motilal Oswal maintains a ‘Buy’ rating on the stock, viewing the replacement segment as the key growth driver. Analysts at Motilal believe that CEAT’s focus on 2W, passenger car and off-road tyre segments will boost margins and lower its dependence on the truck segment.

3. Maruti Suzuki India:

This car manufacturer fell 1.7% on April 25 following the announcement of its Q4FY25 results. Maruti Suzuki India’s net profit declined 1% YoY to Rs 3,911.1 crore, missing Forecaster estimates by 3.8%. The dip in profit was driven by higher discounts on small cars, increased marketing expenses, and costs related to the launch of its first electric vehicle, the e-Vitara SUV.

During the quarter, the operating margin contracted 210 bps to 8.7%. This was due to higher overheads, increased steel costs and start-up expenses for the new Kharkhoda plant, which began commercial production in March 2025. The Kharkhoda plant in Haryana adds 2.5 lakh units to Maruti's annual production capacity, bringing the total to 26 lakh units. The plant has the potential to scale annual capacity up to 10 lakh units.

Maruti Suzuki’s revenue grew 6.4% YoY to Rs 40,920.1 crore, aided by a 2.8% increase in domestic sales volume, totalling 5.2 lakh units. Segment-wise, the compact segment (Baleno, Swift, WagonR) grew 1.9% YoY, while the mini segment (Alto, S-Presso) declined 14.9% YoY. The mid-size segment (Ciaz) saw growth of 77.2% YoY.

Looking ahead, the company expects strong export momentum, targeting at least 20% YoY growth in exports for FY26, supported by demand in Latin America and Africa. Maruti Suzuki currently constitutes nearly 43% of India's total vehicle exports.

One of the key growth drivers for exports for FY26 is expected to be the e-Vitara. Rahul Bharti, Chief Investor Relations Officer, said, “We expect to do a volume of about 70,000 units annually of e-Vitara in FY26, and a large part of it will come from exports.”

Commenting on the future market outlook, Senior Executive Officer of Marketing and Sales, Partho Banerjee, said, “The PV industry is expected to grow by around 1-2% and fundamentally, we are not expecting very high growth in the automotive industry.”

Post results, Motilal Oswal reiterated its ‘Buy’ rating, citing exports as a key growth driver. The brokerage expects the company’s export volumes to reach 7.5- 8 lakh units by FY31 and has given a target price of Rs 13,985.

4. Trent:

This department stores company declined by 4.8% after it announced its Q4FY25 & full year results on April 29. The company’s Q4FY25 net profit declined by 36% YoY to Rs 318.2 crore due to higher inventory & depreciation expenses. However, its revenue increased 27.2% YoY driven by strong performance in its fashion brand 'Zudio'. The stock appears in a screener for stocks which have given consistent high returns over 5 years.

The company beat the Trendlyne forecaster Q4FY25 revenue estimate by 4.1% and the net profit estimate by 7.3%. Driven by store optimization efforts that boosted EBITDA margins by 101 bps to 16% YoY, the company strategically grew its store network. They added a net of 10 Westside locations, reaching 248 in total, and significantly expanded their Zudio presence with 130 new stores, now totaling 765. This growth supports Trent’s strategy of deepening its reach in metro and Tier-1 cities while boosting performance in important micro markets.

Noel N Tata, Chairman of Trent, said, “Given business seasonality, real estate dynamics, and our inventory approach, full-year results better reflect performance across revenue, profitability, and expansion than any single quarter. Our fashion portfolio remains distinct through clear choices and discipline. In FY25, Zudio surpassed $1 billion in revenue. In the Star business, we’re leveraging Trent’s model, with own brands contributing over 70% of revenue. ”

Axis Securities has maintained a ‘Buy’ rating on Trent, citing the company’s strong revenue growth despite macroeconomic challenges. The brokerage highlights that the recent stock price correction presents an attractive entry point for long-term investors. With structural tailwinds in organized retail and significant room for market share expansion, Trent is well-positioned to capitalize on the sector’s long-term growth. However, it has revised its target price downward to Rs 6,650, factoring in increased competitive intensity.

5. Persistent Systems:

This IT consulting & software company has risen 5.2% over the past week after its Q4FY25 net profit grew 6.1% QoQ to Rs 395.8 crore. Revenue increased 5% QoQ to Rs 3,260.5 crore owing to improvements in the banking, financial services & insurance (BFSI), healthcare & life services, and software, hi-tech & emerging industries segments. The stock features in a screener of stocks with increasing revenue over the past eight quarters.

The company’s revenue and net profit beat Forecaster estimates by 0.8% and 0.3%, respectively. North American, Indian, and European business also improved on the back of client wallet expansion and deeper penetration across existing accounts. Its highest contributing segment, software, hi-tech & emerging industries (contributing 40.9% of revenue), improved during the quarter, thanks to increased traction in product engineering mandates, platform modernisation, and AI-led productivity initiatives.

The total contract value (TCV) of the company grew 15.6% YoY to $ 517.5 million (~ Rs 4,361.7 crore) on the back of new bookings of $ 329 million (~ Rs 2,773 crore) during the quarter. However, the TCV declined 12.9% QoQ due to the quarter being seasonally weak. Additionally, the US Department of Government Efficiency (DOGE) and United States Agency for International Development (USAID) implemented cost rationalization initiatives, which impacted several provider and payer clients.

Speaking on the company’s aspirations, Sandeep Kalra, Executive Director and Chief Executive Officer, states, “We target to reach $2 billion in annual revenues by FY27, with a longer-term goal of $5 billion by FY31. We are confident in achieving these targets through strategies tailored to both organic growth and potential acquisitions.”

Post results, KR Choksey upgrades Persistent Systems to a ‘Hold’ rating from ‘Reduce’, with a target price of Rs 5,324 per share. The brokerage is confident in the stock due to its strong Q4FY25 execution, a healthy deal pipeline, and platform-led operating leverage. However, \macro risks like geopolitical uncertainty, tariff overhang, and an elongated deal cycle are rising across the industry. The brokerage expects the firm’s revenue to grow at a CAGR of 19.3% over FY25-27.

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

The Baseline

02 May 2025

Chart of the week: IT stocks slide amid global market volatility

By Omkar Chitnis

The Indian stock market started the year on the back foot. Concerns over valuations amid muted earnings, and an unpredictable US President steering economic policy weighed on investor sentiment. Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “Stock markets dislike uncertainty, and uncertainty has been rising since Donald Trump was elected US president. The series of tariff announcements by Trump has impacted markets.”

The Nifty 50 fell 7.9% from the beginning of 2025 until 6 April. However, optimism over the US-India trade deal helped the index recover 10.8% from its low of 21,758.4 on 7 April, bringing the year-to-date or YTD gain to 2.5%.

The Nifty IT index, which tracks the performance of Indian IT companies, has fallen by 18% from its peak of 46,088 on December 13, 2024.

The Nifty IT index heavyweights include Infosys with a weight of 27.6%, Tata Consultancy Services (TCS) at 23.3%, HCL Technologies at 10.7%, Tech Mahindra at 9.4%, and Wipro at 7.7%.

India's IT industry contributes 7.5% to the GDP and relies heavily on Western markets. The US and Europe account for 54% and 31% of software exports. Any turmoil in these regions directly affects Indian IT. Currently, the US has not imposed tariffs on the Indian IT sector, but increasing tariffs on other sectors will raise costs overall for the tech industry’s American clients. This could lead to postponed investments, extended deal cycles, and delayed projects.

In this edition of the Chart of the Week, we analyse the YTD performance of IT stocks and the reasons behind their weak performance.

Muted overseas growth leads to revenue misses for Infosys and TCS

Infosys and Tata Consultancy Services, the two giants of India’s IT sector, have seen their share prices fall sharply in 2025. Both companies missed revenue estimates in Q4FY25 due to cautious spending from their clients and tariff uncertainties. Infy and TCS derive over 85% of theirrevenue from the US and Europe, and both companies have revised their growth outlook for FY25.

InQ4FY25, Infosys missed revenue estimates by 2.7% due to delayed deals and lower billing for third-party services. The company alsomissed its FY25 revenue guidance by 80 bps, growing 4.2%.

The company’s revenue from the US dipped slightly, while revenue from other global markets dropped 4.5% YoY. However, net profit rose 3.3% QoQ, thanks to lower third-party expenses.

For FY26, management guided muted revenue growth to 3%, citing tighter client budgets due to tariffs, and extended decision cycles for discretionary spending. Salil Parekh, the Infosys CEO, notes, “Clients are cautious with discretionary spending, leading to delays in decision-making and slower deal conversions.” Infosys' share price has declined by 20.2% in 2025.

Morgan Stanley downgraded Infosys to ‘equal weight’ from ‘overweight’ and reduced the target price to Rs 1,740, following the Q4 revenue miss and concern over slowing growth.

Tata Consultancy Services' profit fell 1.2% QoQ in Q4, missingestimates by 3.7%. TCS shares have declined 15.1% year-to-date, due toweakness in North America, where the economic mood has shifted from optimism in the previous quarter to extreme caution.

In Q4, operating margin fell 30 basis points QoQ to 24.2% due to higher sales and marketing expenses and the execution of low-margin deals across the consumer business, manufacturing, and communications segments. These segments account for two-thirds of the company’s total revenue.

Kotak Institutional Equities has lowered its target price on TCS to Rs 3,800 from Rs 3,900, while maintaining a 'Buy' rating, citing weak quarterly performance, margin miss, and concerns over the demand outlook.

Growth cools for LTIMindtree and Tech Mahindra amid renewal delays

Other tech players are also feeling the pain. LTIMindtree and Tech Mahindra, seen as agile challengers in the IT space, are facing slowdown pressures in their business verticals. Rising client concentration risks and weak traction in telecom, consumer, and healthcare verticals have led to revenue shortfalls in FY25.

LTIMindtree shares are down 18.1% year-to-date. The company generates 89% of its revenue from the US and Europe, with its top 10 clients contributing about one-third of the total revenue. Its key client, Citigroup, reduced its reliance on external IT contractors to 20% from 50%, impacting LTIMindtree’s stock performance.

In Q4FY25, net profit rose 4% QoQ but missed estimates by 2.8% due to delays in executing deals and client-specific challenges. Revenue fell 0.5% short of expectations, impacted by headwinds in the consumer and healthcare verticals, which kept the full-year revenue and profit flat.

Tech Mahindra's profit grew 18.6% QoQ to Rs 1,166.7 crore, driven by lower subcontracting costs and a deferred tax gain. However, revenue rose marginally to Rs 13,384 crore, missing estimates due to delays in customer renewals, seasonal impacts, and macro uncertainty. These factors contributed to a 14.5% decline in its share price in 2025.

The company's telecom and manufacturing segments, contributing 50% of total revenue, saw muted growth due to high inflation and reduced client spending. Revenue from the US, which is half of the total revenue, declined by 5.9%.

Jefferies maintained an "underperform" call on the stock with a price target of Rs 1,260 per share, citing weak Q4FY25 revenue growth and high valuations.

Wipro signals caution, while HCL offers an upbeat forecast

Wipro and HCL Technologies hold contrasting forecasts for FY26. Wipro signals a cautious approach due to concerns over tariff impacts, while HCL is optimistic, supported by order backlogs despite challenges in profitability.

Wipro’s struggles continue in Q4, and its shares are down 20% YTD. The company reported subdued revenue growth due to delayed project ramp-ups in its healthcare, consumer, and technology & communication verticals and flat revenue from international markets, specifically from Europe and the Americas regions.

Its profit rose 6.4% QoQ, exceeding estimates, driven by a lower effective tax rate and higher yield from non-core operations.

The company generates the majority of its total revenue from the US and European markets. Management expects revenue to decline by 1.5% to 3.5% in Q1FY26, driven by rising US tariff policies and concerns over a global market slowdown.

Bernstein has an 'Underperform' rating on Wipro with a target price of Rs 200 per share, citing concerns over clients' cautious IT spending and subdued Q1FY26 guidance.

HCL Technologies generates 93% of its revenue from the US and Europe. In Q4FY25, revenue grew 1.2% QoQ to Rs 30,246 crore, in line with estimates, supported by gains in technology services, financial services, and telecom. However, profit declined 6.2% QoQ due to higher employee benefits and tax expenses. The company's shares have fallen 18.6% YTD.

The company’s new bookings reached $3 billion in Q4, driven by the engineering research and development (ER&D) vertical and AI services. For FY26, management expects 2.0% - 5.0% YoY revenue growth. C Vijayakumar, CEO of HCL Technologies, said, “Q4 showed growth in core verticals, and moderate revenue growth is expected in FY26. The focus will be on managing operational costs, improving efficiency, and expanding presence in emerging markets.”

Nuvama upgraded HCL Tech to ‘Buy’ with a target price of Rs 1,700, highlighting its strong performance amid macroeconomic uncertainty and Q4 results in line with expectations.