 "Tata Motors, IndusInd Bank, Axis Bank, Jio Fin, others hit 52-week lows")
Shares of Tata Motors, IndusInd Bank, Axis Bank, Jio Financial Services and Tube Investments of India from the BSE 100 index have hit their respective 52-week lows in Monday’s intra-day trades, on continued selling of equities by foreign portfolio investors (FPIs).
MRF, Astral, 3M India, Adani Wilmar, Godrej Properties, IDFC First Bank, Star Healthcare Insurance, Sona BLW Precision Forgings and Procter & Gamble Hygiene & Health Care from the BSE 200 index hit their 52-week lows.
Indian benchmark equity indices BSE Sensex and Nifty50 were trading lower on Monday, amid mixed global and domestic cues. As the Donald Trump-led new US administration and representatives on Capitol Hill work out ways to fulfil Trump's agenda of imposing tariffs on major trading partners, apart from lowering tax rates, and deregulation, while managing the country's Federal debt levels, markets there are having their own moment of uncertainty and volatility, reminiscent of Trump's first term as US President.
Moreover, with the upcoming Federal Reserve FOMC meeting (scheduled for anuary 28 and 29) likely set to factor in the impact of Trump's policies in its inflation outlook, and rate cut forecasts, markets there are likely to remain cautious.
The market sentiment has turned weak. Sustained foreign portfolio investors (FPIs) selling (Rs 69,000 crore in January, so far) is impacting the markets. Despite domestic institutional investor (DII) buying of Rs 67,000 crore in January, so far, the market is under pressure. Also Read: Smallcap index slips 4%, hits 7-month low; Netweb, Newgen, Solara tank 10%
Meanwhile, among individual stocks, IndusInd Bank was down 3 per cent, at Rs 926.75, falling below its previous low of Rs 927.05 touched on December 20, 2024. In the past two days, the stock price of the private sector lender has slipped 5 per cent.
According to brokerage firm Jefferies, the near-term challenge for IndusInd Bank is its exposure to the microfinance institutions (MFI) segment, which accounts for 35 per cent of its loans, amid an industry-wide rise in defaults. Additionally, the vehicle finance segment faces headwinds due to weaker demand for commercial vehicles (CVs), and adjustments in the two-wheeler (2W) and tractor categories. These factors are expected to exert pressure on the bank’s near-term growth, margins—given the higher yields in these segments—and credit costs.
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IndusInd Bank's board of directors is scheduled to meet on January 31, 2025 to consider and approve the unaudited financial results for the quarter and nine-months ended December 31, 2024.
Shares of Axis Bank hit a fresh 52-week low of Rs 934, down 1.5 per cent in intra-day trades so far. Since January 17, in seven trading days, the stock has slipped 10 per cent after the private sector lender reported weak financial results in the third quarter of financial year 2025 (Q3FY25), highlighted by the bank’s slippages and credit costs reaching multi-quarter highs. Its growth and margins were at multi-quarter lows. The bank's credit cost is now the highest among the top five banks, while its deposit growth has slowed the most.
The bank reported fresh slippages of Rs 5,432 crore, up 46 per cent year-on-year (YoY) and 22.25 per cent sequentially. Of this, Rs 4,923 crore has slipped from the retail portfolio; Rs 215 crore from the SME business; and Rs 294 crore from the wholesale book.
Given the strong growth in Q4FY24 and slower accretion in 9MFY25, the base effect gets adverse in Q4FY25 on deposits and loan growth. So, even with higher quarter-on-quarter (QoQ) deposit growth, the YoY growth in deposits could fall further to ~6 per cent YoY. Accordingly, deposit growth and credit costs remain the key variables to monitor, said analysts at Nuvama Institutional Equities.
Shares of Jio Financial Services hit a 52-week low of Rs 233, plunging 5 per cent in intra-day trades so far. The stock has fallen below its previous low of Rs 240 touched on January 29, 2024. In three days, it has fallen 11 per cent. It had hit a 52-week high of Rs 394.70 on April 23, 2024.
In the past six days, the stock price of the company has slipped 17 per cent after it reported a flat consolidated profit after tax (PAT), at Rs 295 crore for Q3FY25. The company had earned a consolidated net profit of Rs 294 crore in the same quarter of the previous fiscal (Q3FY24).
While PAT remained relatively stable on a YoY basis, it decreased by 57.2 per cent QoQ due to the base effect. Net Interest Income (NII) for Q3FY25 was Rs 205 crore, marking a decline of 21.9 per cent YoY; though it saw a 2.5 per cent increase QoQ. In Q2FY25, the company had earned dividend income of Rs 240.94 crore.
Jio Financial Services, carved out from Reliance Industries, is engaged in the business of investing and financing, insurance broking, payment bank and payment aggregator and payment gateway services.
Despite Jio Financial Services ramping up its operations and expanding its product portfolio, including mutual funds, insurance, and digital solutions, the company remains in a growth and scaling phase. With ongoing investments, regulatory approvals, and operational ramp-up efforts, it is challenging to accurately value or make precise earnings estimates at this stage. While the company’s long-term prospects are promising, the volatility in earnings and the uncertain near-term outlook warrant a more cautious approach, analyst at KRChoksey Shares and Securities said in the company's Q3 results update.