Domestic indices remain in green in late morning deals

Domestic equity indices came off from day’s highs but continued to trade in green in late morning deals on account of buying in NTPC, Power Grid, Kotak Mahindra Bank, Mahindra & Mahindra and Axis Bank. Meanwhile, broader indices were also trading in green with BSE Mid cap index and Small cap index gaining in the range of 0.15-0.65%.  Positive cues from the global markets supported domestic sentiments. Sentiments got boost after minutes from recent Federal Reserve policy meeting boosted expectations for additional U.S. rate cuts.  However, traders were cautious as private report said that India's retail inflation in September likely overshot the Reserve Bank of India's (RBI) 4 per cent medium-term target for the first time since July due to a persistent rise in vegetable prices and a lower year-ago base. 

On the global front, Asian markets were trading mostly in green following positive cues from the US markets overnight. Back home, on the BSE sectoral front, traders were seen pilling up positions in  Utilities, PSU, Power, Industrials and Capital Goods, while selling was witnessed in Healthcare, FMCG, TECK and Consumer Durables.       

The BSE Sensex is currently trading at 81627.46, up by 160.36 points or 0.20% after trading in a range of 81542.65 and 82002.84. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.62%.

The top gaining sectoral indices on the BSE were Utilities up by 1.12%, PSU up by 1.12%, Power up by 1.03%, Industrials up by 0.93% and Capital Goods up by 0.82%, while Healthcare down by 0.61%, FMCG down by 0.17%, TECK down by 0.06% and Consumer Durables down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.44%, Power Grid up by 1.64%, Kotak Mahindra Bank up by 1.61%, Mahindra & Mahindra up by 1.32% and Axis Bank up by 0.89%. On the flip side, Titan down by 1.23%, Hindustan Unilever down by 1.10%, Tata Motors down by 0.86%, Asian Paints down by 0.86% and Sun Pharma down by 0.83% were the top losers.

Meanwhile, Credit rating agency ICRA in its latest report has said that the Indian construction entities are likely to maintain healthy revenue growth in FY25 with a projected YoY growth of 12-15% in this fiscal, aided by an adequate order book position and the government’s thrust on infrastructure activity. The aggregate order book-to-sales ratio ofICRA's sample set of companies was 3.1x as of June 2024, thereby indicating healthy revenue growth prospects over the medium term.

ICRA noted that competition has increased across sub-segments like railways, roads, irrigation as well as urban infrastructure in recent years. However, the road projects awarded by MoRTH/NHAI feel greater competitive pressure, which is also reflected in a majority of the bids awarded at a sizeable discount compared to the authority’s base price. Consequently, it said despite healthy revenue growth expectations and resultant operating leverage benefits, operating margins are expected to remain flattish at around 11% ± 25bps in FY2025. ICRA maintains a Stable outlook for the sector with steady growth in operating income, moderate leverage, and comfortable coverage metrics.

According to the report, the Atmanirbhar Bharat scheme, introduced in June 2020, provided relief to contractors during the Covid-19 pandemic (in the form of monthly billing frequency, and lower bank guarantee requirements amongst others), which eased the funding requirement. ICRA expects the cash conversion cycle to elongate in the current fiscal, post expiry of Atmanirbhar Bharat scheme-related relaxations in March 2024. While debt levels are expected to increase to support the higher working capital requirements, the corresponding operational leverage benefits are anticipated to keep the interest cover at around 3.6-3.9 times in FY2025.

The CNX Nifty is currently trading at 25009.05, up by 27.10 points or 0.11% after trading in a range of 24995.85 and 25134.05. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.40%, Bharat Electronics up by 1.93%, Power Grid up by 1.74%, Kotak Mahindra Bank up by 1.54% and Mahindra & Mahindra up by 1.22%. On the flip side, Adani Enterprises down by 2.04%, Cipla down by 1.75%, Trent down by 1.71%, Britannia Inds down by 1.50% and Titan down by 1.27% were the top losers.

Asian markets were trading mostly in grren; Hang Seng advanced 775.13 points or 3.76% to 21,412.37, Shanghai Composite strengthened 89.04 points or 2.73% to 3,347.90, KOSPI increased 8.86 points or 0.34% to 2,603.22 and Nikkei 225 surged 122.08 points or 0.31% to 39,400.04. However, Jakarta Composite plunged 3.94 points or 0.05% to 7,497.35 and Straits Times fell 2.64 points or 0.07% to 3,593.02.