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Both <keyword id="19896382" type="General" weightage="20" keywordseo="Sensex" source="keywords">Sensex</keyword> and <keyword id="19896381" type="General" weightage="20" keywordseo="Nifty" source="keywords">Nifty</keyword> registered significant gains before closing for the week. While Sensex inched up about 820 points to close at 79,705.91 points, Nifty closed at 24,355.75, up by 0.99% on August 9th, 2024. <keyword id="20023885" type="General" weightage="20" keywordseo="Eicher-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="Eicher Motors" meta.hostid="261" meta.entityid="Eicher Motors">Eicher Motors</keyword> (up by 4.8%), <keyword id="22163816" type="General" weightage="20" keywordseo="Shri-Ram-Finance" source="keywords" meta.keywordsubtype="org" meta.entityname="Shri Ram Finance" meta.hostid="261" meta.entityid="Shri Ram Finance">Shri Ram Finance</keyword> (up by 2.95%), <keyword id="19906967" type="General" weightage="20" keywordseo="Tata-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="Tata Motors" meta.hostid="261" meta.entityid="Tata Motors">Tata Motors</keyword> (up by 2.91%), <keyword id="20668233" type="General" weightage="20" keywordseo="Grasim" source="keywords" meta.keywordsubtype="org" meta.entityname="Grasim" meta.hostid="261" meta.entityid="Grasim">Grasim</keyword> (up by 2.63%), and HCL Tech (up by 2.59%) were amongst the top gainers of the day, while HDFC Life (down by 0.37%), Asian Paints (down by 0.19%), Hindustan Unilever (down by 0.15%), Cipla (down by 0.06%) and ITC (down by 0.04%) were amongst the leading laggards. All broad market indices closed the day in green, with Nifty 50, Next 50, 100, 200 and microcap 250 gaining over 1% each, while India VIX dipped by 7.45%. Amongst sectoral indices, auto, IT, media, PSU, realty and oil and gas indices raked in gains of over 1% each to close the week in green. Out of the 2,780 stocks traded during the day, 1,658 stocks saw declines, 1,028 declined while 94 remained unchanged. 122 stocks hit their 52-week high price, while 29 stocks also hit their 52-week low price. 127 stocks managed to stay in the upper circuit today, or the highest permissible trading price during a single trading session, while 44 hit the lower circuit. Amol Athawale, VP-technical Research, <keyword id="19958661" type="General" weightage="20" keywordseo="Kotak-Securities" source="keywords" meta.keywordsubtype="org" meta.entityname="Kotak Securities" meta.hostid="261" meta.entityid="Kotak Securities">Kotak Securities</keyword> notes that during the week, market slipped below 20 day SMA (Simple Moving Average), but in the second half of the week it trimmed some losses and eventually closed at 24,367/79,722. Technically, the larger texture of the market is still in to the weak side. "However, as long as it is trading above 24,200/79,200, the pullback formation is likely to continue up to 20 day SMA or 24,525/80,400. Further upside may also continue which could lift the market till 24,625/80,800. On the other side, dismissal of 24,200/79,200 could accelerate the selling pressure below which it could slip till 24,000/78,700 or 50 day SMA and 23,850/78,200. For Bank Nifty now, 50,000 would be the immediate reference point for the bulls. Above 50,000, it could bounce back up to 50,800 and 50 day SMA or 51,200. On the flip side, below 50,000 uptrend would be vulnerable", he continued. Shrikant Chouhan, Head Equity Research, Kotak Securities explains that the Nifty-50 index and Sensex declined around 1.5% each in the past week, while the mid-cap index lost around 1.3% and small-cap index lost 2% underperforming large-caps. "Market focus has swiftly moved on from the Union Budget, unveiled in the week, to the ongoing QFY25 earnings season and global factors. The market performance was impacted by a confluence of global factors, such as (1) a sharper-than-expected weakening of the US labor markets, (2) a sharp appreciation of USD-JPY, resulting in the unwinding of Yen carry trades globally and (3) increase in geo-political tensions in the Middle East", he said. "Sectoral indices were largely negative a week-on week basis except for Nifty FMCG, pharma and media. Sectoral indices like capital goods, consumer durable, auto, metal, reality, power and oil and gas list between 1 to 3%. While Bank Nifty was also weak falling around 1.5% during the week. Within the Nifty Index, Cipla (+3.1%), Eicher Motors (+2.4%) and JSW Steel (+1.6%) gained the most, while Titan (-4.4%), Hindalco (-4.3%) and Asian Paints (-4.3%) lost the most. Going forward, D-street will focus on the macro trends, inflation and global situation including geo-political concerns", continued Chouhan.

Stock market closing: Sensex inches 800 points up to close at 79,705.91, auto, IT, PSU bank indices rally

<div type="image" title="The RBI has cracked the regulatory whip on NBFCs and banks, who&amp;#39;ve been pushing microfinance and unsecured loans aggressively to grow their loan books." agency="ANI" msid="114778648" hostid="261" caption="&amp;lt;p&amp;gt;The RBI has cracked the regulatory whip on NBFCs and banks, who&amp;#39;ve been pushing microfinance and unsecured loans aggressively to grow their loan books.&amp;lt;/p&amp;gt;"></div> Imagine this. You have a younger sibling you’re mighty envious of. And why not? Unlike you, they seem to enjoy all the freedom and money in the world. They party like there’s no tomorrow, and here you are, stuck in a boring, ultra-disciplined but responsible routine that feels completely devoid of any independence, and mostly, funds. But of late, things are changing. This sibling is in massive trouble and just cannot escape the parent’s wrath anymore. Long story short, the party is over, and it is time to go back home. The rising defaults on this sibling’s part have now begun pulling the entire house down, thereby attracting the regulator’s ire. <h2>The Wild West of <keyword id="113684" type="General" weightage="20" keywordseo="microfinance" source="Orion">microfinance</keyword> and unsecured loans</h2>It's hard to ignore the issues with microfinance and unsecured loans in India. Many saw them as a small gamble and ignored the rising defaults much like the younger siblings’ tantrums, and now they find themselves in hot waters. The skyrocketing instances of non-payments aren't a micro-issue anymore and are threatening the stability of the entire banking system. In the quarter ended September 30, 2024, 5 of India’s 8 largest private sector <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword> reported a steep rise in their bad loan book, mostly thanks to microfinance loans. Some banks, in a bid to strengthen their fortress against these <keyword id="142154" type="General" weightage="100" keywordseo="bad-loans" source="Orion">bad loans</keyword>, have significantly upped their provisions. For instance, IndusInd Bank set aside Rs 525 crore during July and September 2024 to battle the menace of defaults on microfinance loans, which make up about 9% of its total loan book. See, banks rely heavily on their interest income, which they earn from advancing loans. Any loan where the borrower has not paid interest to the bank or defaulted for 90 days or more becomes bad, i.e. an NPA, or non-performing asset for the bank. And who likes things going bad? Simply put, there has been a steep rise in three areas, much to the dislike of banks and MFIs (micro-finance institutions). But hey, it's mostly their doing! <ol><li>GNPA ratio (gross net performing assets): The quantum of non-performing assets a bank has in proportion to its total assets.</li><li>Provision: The amount banks set aside to take care of such NPAs.</li><li>Slippage ratio: The rate at which good girls go bad, or the speed at which good loans turn into NPAs</li></ol>But how are these plaguing the Indian banking sector? And what does the road ahead look like? We decode it for you. <h2> Microfinance: A not-so-micro-menace</h2>Microfinance loans were initially brought forth for low-income households and individuals i.e. for those who might not generally have access to traditional ways of credit, like bank loans and more. They don’t require collateral or an asset to be pledged in lieu of the loan, making it a tad bit easier for borrowers. As of June 2024, the amount of outstanding loans in the microfinance industry stood at a staggering Rs 4,20,256 crore. Of this, NBFC-MFIs accounted for 40% and banks made for 33% of these. In 2022, RBI, in a bid to inspire some competition in this space, did something radical-they did away with the ceiling on how much interest MFIs could charge their customers. Previously, MFIs could add up to 12% to their cost of acquiring funds to determine the final interest rate chargeable to the consumer. So, assuming that Bank A incurs a 5% cost to acquire funds for further loaning, A could charge up to 17% interest from the end consumer. So, interest rates were in the hands of MFIs, and boy, did they have a gala time with it. Instead of spurring some healthy competition, as RBI expected, MFIs and banks went rogue and all guns blazing, competing for the title of “Who will charge the highest interest?” Recently, RBI banned 4 microfinance institutions (MFIs), namely Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited, and <keyword id="20117932" type="General" weightage="20" keywordseo="navi-finserv" source="keywords">Navi Finserv</keyword> from disbursing loans effective October 21, 2024. Why? Because they were charging 14% extra interest over their original cost of funds. To maintain their loan books (and pockets), banks and NBFCs resorted to shady practices like netting off loans, which RBI has now advised MFIs against. Here, lenders allow borrowers to settle a previous outstanding loan by issuing them a new loan! As crazy as it sounds, it helped banks to report less of their total assets as NPAs, since the new credit would cover pending instalments of the borrower’s previous loan. Then there was the issue of borrowers overleveraging, i.e. taking multiple loans using different IDs from various lenders and then failing to honour any of them. The consequence? Banks and NBFCs end up with massive NPAs. Data from credit bureaus suggests that over the last quarter, there was a 17.2% rise in the number of borrowers who had 5 or more active loans at the same time. <h2>Growth &gt; Caution</h2>It's an age-old tale unfolding yet again in India’s banking sector- Icarus flew too close to the sun and eventually, fell to its death. Between April and June 2024, NBFCs microfinance portfolio jumped by 2.7%. If you see this in terms of loan sources, microfinance loans issued by banks grew by 11.2% in Q1FY25. But the same portfolio in NBFCs swelled by almost double-23.9%. While most of these loans had an average ticket size between Rs 30,000-50,000, there was a sharp spike in the number of loans that had a ticket size of Rs 80,000 or more. Data suggests that as of March 2024, more than 12% of all microfinance borrowers had over 4 or more active loans. In dating parlance, this is a classic case of borrowers going polyamorous, minus the honesty and transparency. Not the best of situations, you'd agree! <h2>Will banks and NBFCs stand up to this stress?</h2>If their results for Q2FY25 are to be believed, NBFCs are not handling the pressure all that well. Or even slightly well. Only a few banks like Bank of Baroda (BoB), ICICI, and Indian Bank were up for the battle, even witnessing a decline in their loan delinquencies. Some others, like IndusInd Bank, saw their stock dip by a massive 16.2% over the last 5 days. Its slippages in the previous quarter burgeoned from Rs 15.3 billion in Q1FY25 to Rs 17.9 billion in Q2. As a result, the bank pushed a staggeringly high amount of money to create an NPA cushion for itself. While its management has highlighted its preference for secured lending, that was hardly reflected in its actions during the quarter, where growth in unsecured personal loans remained exceptionally high at over 7% on a QoQ basis. Turns out, only 44% of customers in IndusInd Banks’ microfinance loan portfolio were exclusive to it. The rest 47% were, you guessed it right-polyamorous! 27% had borrowed from another lender as well, apart from IndusInd Bank, while 20% were those who had outstanding loans with two other lenders, apart from IndusInd Bank. IndusInd Bank’s credit card segment did not miss the NPA bus and accounted for 7-8% of its GNPAs. Canara Bank’s total slippages during the previous quarter jumped to Rs 11.1 billion, up by 24.7% QoQ, and making up for 3.6% of its total loans. As for Bandhan Bank, its gross NPA for Q2FY25 inched up on a QoQ basis, up from 4.23% in Q1, to 4.68% in the second quarter. IDFC Bank’s heavy provisioning for its NPAs marred its profits significantly, causing its PAT (profit after tax) to dip by 73% on a YoY basis. Data from ICRA Analytics suggest that the AUM (asset under management) growth in microfinance loans and unsecured (personal and business) loans by the NBFCs will moderate to 10-12% and 19-21%, respectively, in FY2025 compared to 30% and 38%, in FY2024. Says A M Karthik, Senior Vice President &amp; Co-Group Head, Financial Sector Ratings, ICRA, “As bank funds constitute a larger share in the overall funding of NBFCs, a slower credit flow from banks to the NBFCs will compress their AUM growth. The NBFCs in unsecured and digital lending businesses shall face a higher squeeze in funding compared to others, and the unsecured lending space will continue to be a source of stress in the near term.” There has been uninhibited growth in <keyword id="6051027" type="General" weightage="20" keywordseo="Unsecured-loan" source="Orion">unsecured loan</keyword>s, apart from just the microfinance segment. For instance, Axis Bank’s gross slippages jumped by Rs 4,443 crore, largely thanks to its unsecured business. The same is the case with Yes Bank, which saw 35–40% of its retail slippages emerging from the unsecured loan portfolio. <keyword id="6376194" type="General" weightage="20" keywordseo="kotak-mahindra" source="Orion">Kotak Mahindra</keyword> Bank was also quick to follow Yes Bank’s suit, with around 35%-40% of its slippages coming from credit cards. <h2>How is the road ahead?</h2>While RBI has just cracked its whip and served a warning at the moment, experts at Morgan Stanley believe that more changes (read regulatory lashes) are underway. Moreover, with both festive and wedding seasons underway in our country, unsecured lending might pick up momentum, much to the disdain of the calibrated approach banks have been taking towards it so far. But if the situation doesn't improve, RBI will not waste any time in becoming the typical tyrannical <keyword id="19897820" type="General" weightage="20" keywordseo="bollywood" source="keywords">Bollywood</keyword> headmaster who runs his dominion with an iron fist. However, that's a story for another day. Do you have a topic in mind you'd want a simpler explanation for, or insights or personal experience to share on personal finance and more? Contact us at businessinsider@timesinternet.in.

Simply Put: Is the lending party over? The dangerous tango of Indian banks with microfinance and unsecured loans

<keyword id="23031470" type="General" weightage="20" keywordseo="ventive-hospitality" source="keywords">Ventive Hospitality</keyword>, a joint venture between Blackstone Group and <keyword id="21088756" type="General" weightage="20" keywordseo="panchshil" source="keywords">Panchshil</keyword> Realty, on Tuesday filed preliminary papers with capital markets regulator Sebi to raise Rs 2,000 crore through an initial public offering (IPO). The Pune-based company's IPO is completely a fresh issue of equity shares with no offer-for-sale (OFS) component, according to the draft red herring prospectus (DRHP). Also, the company may consider a pre-IPO placement aggregating up to Rs 400 crore. If such placement is undertaken, the issue size will be reduced. Proceeds of the IPO to the tune of Rs 1,600 crore will be used for debt payment. As per the draft papers, <keyword id="23114126" type="General" weightage="20" keywordseo="ventive" source="keywords">Ventive</keyword> Hospitality has a borrowing of Rs 412.60 crore as of March 2024. Ventive Hospitality is a hospitality asset owner primarily focused on luxury offerings across business and leisure segments in India and the <keyword id="19926427" type="General" weightage="20" keywordseo="maldives" source="keywords">Maldives</keyword>. At present, Panchshil holds a 60 per cent stake in Ventive, while Blackstone owns the remaining 40 per cent stake. As of March 2024, the company's portfolio comprised 11 operational hospitality assets comprising 2,036 keys, of which six are operated by or franchised from Marriott, two are operated by or franchised from Hilton and the remaining three are operated by other hotel operators. Some of its hospitality assets are Anantara Maldives, Conrad Maldives, JW Marriott, Pune and The Ritz-Carlton, Pune. JM Financial, Axis Capital, ICICI Securities, IIFL Securities, <keyword id="20424038" type="General" weightage="20" keywordseo="kotak-mahindra-capital-company" source="keywords">Kotak Mahindra Capital Company</keyword>, <keyword id="19951017" type="General" weightage="20" keywordseo="sbi-capital-markets" source="keywords">SBI Capital Markets</keyword> and HSBC Securities and Capital Markets(India) Private Ltd are the book running lead managers for the issue. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/ather-energy-looks-to-raise-3100-crore-files-ipo-papers-with-sebi/articleshow/113214971.cms">Ather Energy looks to raise ₹3,100 crore, files IPO papers with SEBI</a> <a href="https://www.businessinsider.in/tech/mobile/news/iphone-16-pro-iphone-16-pro-max-india-price-specifications/articleshow/113204340.cms">iPhone 16 Pro and iPhone 16 Pro Max with bigger displays, A18 Pro chipset launched starting at ₹1,19,900</a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-iphone-16-iphone-16-plus-price-specs/articleshow/113203568.cms">iPhone 16, iPhone 16 Plus with A18 chipset launched starting at ₹79,900</a>

Ventive Hospitality files papers with Sebi to raise Rs 2,000-cr via IPO

Mumbai, <keyword id="19897354" type="General" weightage="20" keywordseo="bajaj-auto" source="keywords">Bajaj Auto</keyword> has toppled Mahindra &amp; Mahindra (M&amp;M) as the third most valued auto company in the country. Bajaj Auto's market cap on Thursday crossed the Rs 2 lakh crore-mark to touch Rs 2.04 lakh crore, surpassing M&amp;M. Maruti <keyword id="20032993" type="General" weightage="20" keywordseo="suzuki" source="keywords">Suzuki</keyword> has a market cap of Rs 3.13 lakh crore, while <keyword id="19906967" type="General" weightage="20" keywordseo="tata-motors" source="keywords">Tata Motors</keyword> mcap is Rs 2.59 lakh crore. Bajaj Auto stock gained 5.3 per cent to close at Rs 7,596 on Thursday. <keyword id="20332980" type="General" weightage="20" keywordseo="arun-agarwal" source="keywords">Arun Agarwal</keyword>, Vice-President &amp; Automobile Analyst, <keyword id="19958661" type="General" weightage="20" keywordseo="kotak-securities" source="keywords">Kotak Securities</keyword>, said Bajaj Auto's volumes grew 14 per cent QoQ led by 30 per cent QoQ volume growth in the domestic two-wheeler segment. Its EBITDA margin expanded YoY, supported by commodity tailwinds. In Q3FY24, gross profit per vehicle and EBITDA per vehicle improved over Q2FY24. Recovery in the domestic two-wheeler segment is expected to continue. "We are impressed by Bajaj Auto's margin resilience despite adverse mix (3W volume contribution down 300bps QoQ). This validates the fact that its margin performance is not overtly dependent on 3W performance. Domestic 2W retail market share gain has been impressive at 150bps YoY to 12 per cent YTDFY24. Domestic 2W industry volumes have held up post festive season as well. We expect these to grow in high single-digit in FY25E," Elara Securities said.

Bajaj Auto topples M&M as third most valuable auto company in India

Both <keyword id="19896382" type="General" weightage="20" keywordseo="Sensex" source="keywords">Sensex</keyword> and <keyword id="19896381" type="General" weightage="20" keywordseo="Nifty" source="keywords">Nifty</keyword> closed the day in green, with Sensex also crossing the 80,000 mark for the first time. While Nifty closed at 24,286.50 points, up by 0.67%, Sensex closed at 79,986.80 points, having inched up by 0.69%. As for broad market indices, all of them, except India VIX closed the day in green. While VIX ended the day 3.18% down, Nifty next 50 gained 1.08%, and Nifty small cap 100 added 1.03%. As for sectoral indices, <keyword id="722345" type="General" weightage="20" keywordseo="Nifty-Bank" source="Orion">Nifty Bank</keyword> was up by 1.77%, and financial services was up by 1.80%. PSUs jumped up 1.06%, while private banks inched up by 2.02%. <keyword id="6354777" type="General" weightage="20" keywordseo="Media" source="Orion">Media</keyword> was down by 0.39%, and metal jumped by 1.06 to end the day in green. During the day, Tata Consumers (up by 3.55%) and <keyword id="895682" type="General" weightage="20" keywordseo="Adani-Ports" source="Orion">Adani Ports</keyword> (up by 2.39%) took the lead, but it was private banks who led the top gainers rally during the day, with <keyword id="19991962" type="General" weightage="20" keywordseo="Kotak" source="keywords">Kotak</keyword> bank up by 2.23%, <keyword id="19896378" type="General" weightage="20" keywordseo="HDFC" source="keywords">HDFC</keyword> bank up by 2.14% and Axis bank rising up 1.82%. On the other hand, TCS lost 1.23%, Titan lost 1.11%, Reliance shed 0.68%, Tata Motors lost 0.41% and Hindalco lost 0.40%, making them amongst the top losers of the day. Out of the 2,797 stocks traded during the day, 1,745 saw advances, while 970 saw declines. 215 stocks hit their 52-week high price, while 16 stocks hit their 52-week low. Around 201 stocks hit the upper circuit during the day's trade, while 44 hit the lower circuit. Geojit financial service's share rallied 4.02% to end day at Rs 100.37, after it registered a sharp fall yesterday, following SEBIs orders on uniform charging, and not taking trading volume into play. The firm reported that during FY 23-24, approximately Rs.40 lakhs, which was the difference between the amount recovered from clients and the charges paid to Exchange, had been recorded as income for the year. However, this amount constitutes 0.067% of the total income and 0.22% of profit before tax for FY 23-24. <h2>Experts advise caution as Sensex hits 80,000</h2>According to Mr. Aditya Gaggar, director of Progressive Shares, "Indian bourses commenced the session on a strong note at a fresh high of 24,290 but due to lack of follow-through, the Index oscillated in a well-maintained range to end the session at 24,286.50 with gains of 162.65 points. Barring media, all other sectors ended the day in green with Bank Nifty being the top performer followed by metal and PSU Banks. Broader markets outperformed the frontline index as mid and smallcap gained by 0.79% &amp; 1.03% respectively". Shrikant Chouhan, Head Equity Research, Kotak Securities noted that today, the benchmark indices registered a fresh all time high of 24,309/80,074. The Nifty ends 162 points higher while the Sensex was up by 545 points. Almost all the major sectoral indices were traded in to the positive territory but private bank index outperformed rallied over 2 percent. Technically, after a gap up opening market comfortably trading above 24,200/79,600 resistance level which is largely positive. "In addition, on intraday charts it is holding higher high and higher low formation, which supports further uptrend from the current levels. We are of the view that, as long as the index is trading above 24200/79600 the bullish structure is likely to continue". Arvinder Singh Nanda, Senior Vice President of Master Capital Services noted that BSE Sensex today touched the 80,000 mark for the first time, setting a new all-time high. "This milestone comes after the index added the last 10,000 points in under seven months, having first hit 70,000 on December 11, 2023". But while the long-term outlook remains positive, he advised caution at current levels.

Stock market closing: Sensex crosses 80k, Kotak, HDFC and ICICI bank lead the rally

After several days of impressive gains, Indian stock indices saw some correction on September 27, 2024, as investors booked profits following a prolonged rally. The <keyword id="19896382" type="General" weightage="20" keywordseo="sensex" source="keywords">Sensex</keyword>, which briefly touched the 86,000 mark during the trading session, closed the day slightly lower at 85,571.85 points, down by 264.27 points or 0.31%. Similarly, the <keyword id="19896381" type="General" weightage="100" keywordseo="nifty" source="keywords">Nifty</keyword> index, which reached a lifetime high of 26,277.35, eventually closed in the red at 26,175.15 points, down by 40.90 points or 0.16%. Market participants were primarily focused on locking in gains after the indices reached record highs. Sectoral performance saw a divergence, with banking, financial services, media, and real estate stocks facing pressure. <keyword id="19969359" type="General" weightage="20" keywordseo="vinod-nair" source="keywords">Vinod Nair</keyword>, Head of Research at <keyword id="19933343" type="General" weightage="20" keywordseo="geojit-financial-services" source="keywords">Geojit Financial Services</keyword>, pointed out that after the recent surge, "the benchmark indices experienced a sideways movement today as investors engaged in profit booking at elevated levels." He further added that market participants are eagerly awaiting the second-quarter earnings report, which could provide clarity on future earnings potential. <h2>Global factors and FPI activity</h2>One of the key drivers behind the <keyword id="6357440" type="General" weightage="20" keywordseo="stock-market" source="Orion">stock market</keyword> rally in recent weeks has been the US Federal Reserve’s decision to loosen its monetary policy, with a significant 50-basis-point cut in interest rates. This move has resulted in a flow of capital from the US to markets like India, where policy rates are higher, thus providing attractive returns. The looser monetary policy in the US has encouraged foreign portfolio investors (FPIs) to continue investing in Indian equities. FPIs have remained net buyers in India for the fourth consecutive month, further supporting the stock indices. As per data from the <keyword id="20070086" type="General" weightage="20" keywordseo="national-securities-depository-limited" source="keywords">National Securities Depository Limited</keyword> (NSDL), FPIs have purchased Indian stocks worth ₹48,822 crore in September alone, a trend that has bolstered market confidence. The strong FPI inflows reflect optimism about India's economic prospects and its equity market returns. <h2>Sectoral performance and outlook</h2>Despite the overall market decline, the performance varied across different sectors. Public sector banks, defence, and railway stocks, which had seen significant buying interest earlier, took a backseat as pharma, private banks, and mid-size IT companies began to attract attention due to their appealing valuations. These sectors are now expected to drive the next market phase in the coming quarters, according to Krishna Appala, Senior Research Analyst at Capitalmind Research. The markets traded in a narrow range for most of the day, with little overall movement despite positive global cues. An early rebound in the IT sector briefly boosted the indices, but the gains were short-lived. The broader indices, including the Nifty and Sensex, remained largely flat, echoing the sluggish performance of heavyweight stocks. Ajit Mishra, Senior Vice President of Research at Religare Broking, noted that "sector-wise, pharma and energy posted solid gains, while banking and real estate sectors saw profit booking." Looking ahead, Mishra maintained a bullish outlook on the markets, advising investors to use periods of consolidation or dips to accumulate quality stocks. He added that, in the absence of any significant domestic triggers, global markets will likely set the direction for Indian equities. On the Nifty index, he anticipated strong support around the 25,900-26,000 zone, with an upside target at 26,500. <h2>Technical insights</h2>Hrishikesh <keyword id="23343291" type="General" weightage="20" keywordseo="yedve" source="keywords">Yedve</keyword>, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd., shared his technical analysis of the <keyword id="20105832" type="General" weightage="20" keywordseo="nifty-and-bank-nifty" source="keywords">Nifty and Bank Nifty</keyword> indices. He observed that while the Nifty started the day on a flat note and registered a new lifetime high, it eventually faced profit booking and closed marginally lower. "Technically, the index on a daily scale has formed a small red candle, but on the weekly scale, it has formed a big green candle," Yedve explained. He added that as long as Nifty holds above the 26,000 level, a "buy on dips" strategy should be followed, with an immediate short-term target of 26,500. On the Bank Nifty front, Yedve pointed out that the index started on a weak note and remained under pressure throughout the day, closing at 53,834. He highlighted the formation of a bearish Marubozo candle on the daily chart, which signals potential short-term weakness. However, on the weekly scale, Bank Nifty remains above the breakout point of a rounding bottom pattern, indicating strength. "In the short term, Bank Nifty may witness consolidation or profit taking, but any dip around 53,350-53,400 will offer fresh buying opportunities," Yedve advised. <h2>Market wrap-up and outlook</h2>Reflecting on the week’s performance, <keyword id="23343292" type="General" weightage="20" keywordseo="amol-athawale" source="keywords">Amol Athawale</keyword>, VP-Technical Research at Kotak Securities, noted that the benchmark indices had maintained positive momentum, with the Nifty ending 1.5% higher and the Sensex gaining over 1,030 points. <keyword id="20102108" type="General" weightage="20" keywordseo="metal" source="keywords">Metal</keyword> and auto stocks were the standout performers, with the Metal index rising by 7% and the Auto index by 4.5%. Athawale highlighted the importance of the Nifty and Sensex breaching key resistance levels of 26,000/85,000 last week, which has provided a boost to market sentiment. Technically, Athawale pointed to the formation of a bullish candle on the weekly charts and an uptrend continuation pattern on the daily and intraday charts, signalling a potential continuation of the rally. However, he cautioned that "buying on dips and selling on rallies would be the ideal strategy for short-term traders." He identified 26,100/85,300 as crucial support zones for the Nifty and Sensex, with resistance expected around 26,400-26,500/85,900-86,300. As for Bank Nifty, Athawale described the medium-term outlook as bullish but noted that overbought conditions could lead to range-bound activity in the near term. He suggested that 53,500-53,100 would serve as key support zones, while profit booking could occur near 54,500-54,800. (With inputs from agencies)

Indian markets ease as profit booking follows record-breaking streak

<ul><li>Large-cap stocks offer better reward-risk balance given more reasonable valuations say experts in their Diwali picks.</li><li>BSFI, domestic upcycle theme along with real-estate, power and infra amongst Diwali picks by brokerages.</li><li>Defence and railway stocks like MTAR Technologies, HAL, Titagarh Wagons also made it to the best <keyword id="10273453" type="General" weightage="20" keywordseo="diwali-stock-picks" source="Orion">Diwali stock picks</keyword> for Samvat 2080. </li></ul>The Diwali festive fervour is here and the Indian stock markets will soon end Samvat 2079 after hitting many milestones. Not only did the benchmark indices gain 6% during the year — Nifty touched 20,000 and Sensex surpassed 67,900. The equity markets have also shown extreme resilience in times of many geopolitical uncertainties like the Israel-Hamas conflict on top of the Russia-Ukraine war, rising inflation, sharp uptick in bond yields and more. For investors who are looking to build an auspicious portfolio for Samvat 2080, experts advise restraint and pick stocks that stand tall amidst corrections. “The recent sharp correction in stock prices may reflect growing recognition of short-term and medium-term challenges or a natural correction in the market from high levels. In our view, large-cap stocks offer better reward-risk balance given more reasonable valuations versus lofty valuations of most mid- and small-cap stocks,” says <keyword id="66607" type="General" weightage="80" keywordseo="kotak-securities" source="Orion">Kotak Securities</keyword>. According to the brokerage firm, short term challenges include higher-for-longer interest rates, and weak domestic consumption. It also expects disruption across sectors as a medium term challenge. Going ahead, it sees value in BFSI stocks, while <keyword id="100578" type="General" weightage="80" keywordseo="sharekhan" source="Orion">Sharekhan</keyword> sees value in domestic upcycle themes, with a few others that can leverage greenshoots in the export market. “Investors should view the current market weaknesses as valuable buying opportunities for constructing a top-tier portfolio aimed at riding the multi-year economic upcycle in India and use the opportunity for wealth creation over the next few years. Corporate earnings are expected to grow at a CAGR of 15% for the next two years, with over 20% earnings growth anticipated in the BSE 200 over the same period,” says Sharekhan. Here are a few stocks picked across brokerages’ Diwali picks. Best of the best: Diwali picks with rocket-like returns <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Stock </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Upside </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tata Power </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">43% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IDBI Capital </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Titagarh Rail </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI Securities </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">JBM Auto </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">35% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Chola Securities </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IDFC First Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">37% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Anand Rathi </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Go Fashion </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">JM Financial </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sansera Engineering </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">43% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Monarch Networth Capital </td></tr></tbody></table> RIL rules, but DLF and small caps on the list too Most of the Diwali picks of stocks veered towards a good balance of large caps. But a few high performing small cap stocks such as RVNL, <keyword id="75435" type="General" weightage="80" keywordseo="gokaldas-exports" source="Orion">Gokaldas Exports</keyword>, <keyword id="19427151" type="General" weightage="80" keywordseo="garware-hitec" source="Orion">Garware Hitec</keyword>, <keyword id="14661372" type="General" weightage="80" keywordseo="syrma-sgs" source="Orion">Syrma SGS</keyword> made it to the pataka stock lists compiled across brokerages. The most common name across lists is Reliance Industries, as companies see good upside in the stock in the next few years. J M Financial says that RIL’s net debt concerns are overdone, and that it has industry leading capabilities across businesses to drive robust 14-15% earnings per share (EPS) compounded annual growth rate (CAGR) over the next 3-5 years. “Jio’s ARPU expected to rise at 10% CAGR over FY23-28 with ARPU being on a structural uptrend given the industry structure, future investment needs, and the need to avoid a duopoly market. Further, strong growth momentum continues in the company’s Retail business as RIL is driving omni-channel capabilities across segments,” the brokerage says. The next most common stock across Diwali picks is DLF. Even as Kolte Patil, Lodha and Godrej Properties were also picked as the real estate sector theme remained strong, this mega developer made it to three brokerages’ best picks. “DLF's strong leadership in the Delhi-NCR region, a vast residential project pipeline, a significant rental portfolio, ample land reserves with low carrying costs, and favourable market conditions create a promising environment for substantial growth,” said Anand Rathi. Banks were also part of each brokerage’s picks with Union Bank of India, ICICI Bank, Bank of India, Axis Bank making the cut. Most of them back defence and railway stocks as well like HAL, Titagarh Wagons and MTAR Technologies – all which have given good returns this year. Auto stocks like M&amp;M, TVS Motor, Tata Motors, Maruti and Ashok Leyland also rode into the Diwali picks, with a good mix of power and infrastructure stocks like Tata Power, Power Grid, BHEL and L&amp;T are expected to light-up portfolios on the day India will glow with the light of diyas.

Enter Samvat 2080 with these Diwali pataka stocks

The foreign portfolio investors have infused Rs 15,420 crore so far this week in the Indian <keyword id="19911354" type="General" weightage="20" keywordseo="equity-market" source="keywords">equity market</keyword>, according to the data from the <keyword id="20294652" type="General" weightage="20" keywordseo="National-Securities-Depository" source="keywords" meta.keywordsubtype="org" meta.entityname="National Securities Depository" meta.hostid="261" meta.entityid="National Securities Depository">National Securities Depository</keyword>. The net investment by the foreign portfolio investors (<keyword id="19979726" type="General" weightage="20" keywordseo="FPI" source="keywords">FPI</keyword>) surged to Rs 30,772 crore so far in July indicating the good buying by the <keyword id="19900795" type="General" weightage="100" keywordseo="foreign-investors" source="keywords">foreign investors</keyword> in the <keyword id="19991358" type="General" weightage="20" keywordseo="Indian-markets" source="keywords">Indian markets</keyword>. The foreign investors have so far bought equities worth of Rs 1,30,138 crore this year. "FPI flows are expected to remain volatile this week. The markets were strong, led by strong earnings and commentary from the large-cap. This week, the markets of India, Brazil, Indonesia, Malaysia, Philippines, and South Korea witnessed inflows, while the markets of Taiwan, Thailand and Vietnam witnessed outflows" said Shrikant Chouhan, Head of Equity Research, Kotak Securities. Internationally the foreign investors this week have injected around $585 million in Brazil, $300 million in Indonesia, $324 million in Malaysia and $2,085 million in South Korea. On the other hand, Taiwan witnessed an outflow of $5325 million and Vietnam witnessed a selling of $278 million of foreign investment this week. According to market experts, foreign investors are investing in Indian markets amid a weakening in <keyword id="22484170" type="General" weightage="20" keywordseo="dollar-and-bond-yields" source="keywords">dollar and bond yields</keyword>, and if this trend continues, foreign investment will continue as well. "During the fortnight ending 15th July, FPIs were buyers in autos, capital goods, healthcare, IT, telecom, and oil and gas. A notable trend was the lack of buying in <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, which partly explains the poor performance of financial services in July so far. If the recent trend of weakness in dollar and bond yields persists, FPIs are likely to continue their buying in the market," said V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services. Foreign Institutional investors were sellers in January, April, and May, cumulatively selling equities worth around Rs 60,000 crores. However, they were buyers in February, March, and June, with cumulative purchases amounting to Rs 63,200 crores.

Foreign investors infuse Rs 15,420 crore in Indian markets this week

<ul><li><keyword id="1402053" type="General" weightage="20" keywordseo="ashok-vaswani" source="Orion">Ashok Vaswani</keyword> is a Stanford graduate who is also a CA, CS and did his Bachelors at Sydenham College of Commerce.</li><li>Vaswani worked with <keyword id="44473" type="General" weightage="20" keywordseo="citigroup" source="Orion">Citigroup</keyword> and more recently, at <keyword id="6386585" type="General" weightage="20" keywordseo="barclays" source="Orion">Barclays</keyword>, where he built and grew the business to a scale.</li><li>Vaswani is obsessed with technology but also focused on earning the trust of his consumers.</li><li><keyword id="45051" type="General" weightage="20" keywordseo="uday-kotak" source="Orion">Uday Kotak</keyword> has roped in an outsider given the extent of the transformation that <keyword id="46013" type="General" weightage="20" keywordseo="kotak-mahindra-bank" source="Orion">Kotak Mahindra Bank</keyword> will need in times to come when banks will have to fight for wallet share of consumers. </li></ul>Today, you don’t need to step into a bank to make payments, check your balance or even request for a cheque book. That is if you still use those booklets. Since your bank’s mobile app allows you to do all this and much more online, can there be more digitisation in banking? Well, the new CEO of Kotak Mahindra Bank Ashok Vaswani thinks that a lot more technology can be deployed in banks. As the CEO of Barclays Bank UK, Vaswani knows how the lives of consumers can transform with digitisation. He is also cognisant of the fact that a bank does not only cater to millennials or GenZ population. At Barclays, he had a team of tech experts to help consumers who were even in their 1990s such that they could learn not just digital banking but even chat with grandkids on Skype or Zoom. That is how the new CEO of Kotak Mahindra Bank thinks, given that his head and heart are in the right place. At a time when banks are struggling to keep consumers happy while maintaining high profit margins, Vaswani could well be the man who can plug the gaps. And, if there’s something he can talk about for hours, it is the technological transformation of financial services. Not only is he cognisant of the ease that digital banking brings, but also the risk that comes along with it. This generational shift at India’s fourth largest private bank in India clearly wants to up its game in the years to come by leveraging technology to transform not only its operations but also create new and better services for its customers. Imagine an AI Bot that actually tells consumers every month on how spending on eating out is much more than feasible or that average monthly savings are not good enough when you retire. Yes, Vaswani believes that is the next stage of banking as it can open up different ecosystems. In an interview a few years ago at the University of West England, Bristol, he said: “I would submit that a lot more digitisation can happen. Why would I not be able to tell you, you are earning so much, you are spending this much and you should be saving. Can you imagine, you spent so much money on Uber and that you should be careful?” There are so many aspects of digital transformation that limits are frankly only set in the mind. As the CEO of Barclays UK, he has not just built a lot of products for consumers but even their confidence in the bank and the banking system. It is a refreshing change to hear a CEO talk about confidence in the company and not just on margins. Vaswani has a proven track record spanning three and a half decades across the world’s leading banks. He was initially at Citigroup and more recently, at Barclays, where he built and grew the business to a scale. He brings with him significant executional experience with a high degree of compliance and industrial strength across corporate and consumer businesses. Vaswani was Chief Executive Officer of Barclays Bank, UK and subsequently CEO of their global consumer, private, corporate and payments businesses and Member of the group executive committee. Earlier, he was CEO Citigroup Asia Pacific and Member of the Citigroup Global Operating Management Committees. He also built and ran various country and regional businesses across geographies. What makes him interesting is that he has not only run global banks but has even been president of Pagaya Technologies, a US-Israeli AI fintech company. This kind of exposure makes him a much better candidate than any insider at Kotak Mahindra Bank. At last count, there were three top contenders for the job, but Uday Kotak has roped in an outsider given the extent of the transformation that the bank will need to undertake to remain relevant in the face of competition from other fintechs. Ashok is married to Veena and their daughter is working in the United States of America. It is interesting that Uday Kotak, first generation founder and promoter of Kotak Mahindra Bank, has brought in an outsider to run the bank. Organisations typically are wary of bringing in outsiders at top jobs mostly because of the friction that results from such hiring due to cultural fitment and acceptance of a known candidate. It is easier for the rank and file to accept an insider rather than an outsider but Uday Kotak has chosen to take the risky route. While in some unfortunate cases like Infosys, where Vishal Sikka did not fare too well when promoters stepped away in 2014, the experiment of outsiders has been rather successful at the Tata Group. When Ratan Tata took over the reins at the Tata Group, he brought in Kishor Chaukar who came from ICICI Securities to head Tata Industries. Ravi Kant came in from Philips India in 1999, and headed commercial vehicles for Tata Motors before becoming MD in 2005. In 1998, the then vice-chairman of Hindustan Lever (now known as Hindustan Unilever), moved to Tata Sons as executive director. Typically, Indian corporations bring in overseas talent when they believe that the requisite skills are not available in India. But given that India’s private banking sector has grown and flourished under the stewardship of homegrown talent, this shift is an interesting move by Uday Kotak, who clearly sees merit in Vaswani’s experience outside of India. No wonder Uday Kotak, Founder and Director, Kotak Mahindra Bank said: “I am proud that we bring a ‘Global Indian’ home to build Kotak and India of tomorrow.” Interestingly, Ashok Vaswani is a Bachelor of Commerce, Economics and Accountancy, from the Sydenham College of Commerce and Economics (Bombay University), CA from the Institute of Chartered Accountants of India, CS from the Institute of Company Secretaries of India and Executive Education from the Stanford University Graduate School of Business. Uday Kotak too is alumnus of Sydenham College and has a postgraduate degree in management studies in 1982 from Jamnalal Bajaj Institute of Management Studies.

The CEO who believes that there’s a lot more to digitise at banks

<ul><li><keyword id="7347353" type="General" weightage="20" keywordseo="Capex-revival" source="Orion">Capex revival</keyword> and increased infrastructure spending by the government are likely to be among the key drivers of the <keyword id="6356076" type="General" weightage="20" keywordseo="Indian-economy" source="Orion">Indian economy</keyword> in 2023, according to analysts. </li><li>Analysts say they are already seeing multiple green signals of higher capacity utilisation levels, higher capital spending and de-leveraged balance sheets which point to a capex cycle revival. </li><li>While India’s economy will be punctuated by global headwinds, it is still estimated to grow in the 4.8-5.9% range in 2023, outpacing the 1.8% projected global growth. </li></ul>The Indian economy’s growth expectations in 2023 will be punctuated by global headwinds – mainly a demand slowdown and geopolitical overhangs, according to analysts at <keyword id="1575218" type="General" weightage="80" keywordseo="kotak-economic-research" source="Orion">Kotak Economic Research</keyword>. While India’s GDP growth is projected to be between 4.8-5.9% next year by global agencies, these “negative surprises” remain a risk factor. According to analysts, <a href="https://www.businessinsider.in/business/corporates/news/india-on-the-cusp-of-the-post-covid-capex-boom-say-analysts/articleshow/93726444.cms">multiple green signals</a> like capacity utilisation levels, higher capital spending and de-leveraged balance sheets give strong indications of a revival in the capex cycle that will be a big spur to the economy. The Indian government has also accelerated capex spends – in the first half of FY23, the government’s capex spends stood at ₹3.2 lakh crore. This is equal to 60% of the capex spend for the whole of FY22, which was ₹5.5 lakh crore. Together, these factors paint a relatively optimistic picture for the Indian economy heading into 2023 – it is set to outpace the global economic growth average of 1.8%. Despite a slowdown in the Indian economy due to elevated inflation and the post-Covid boost wearing off, the World Bank also recently<a href="https://www.businessinsider.in/india/news/world-bank-revises-indias-gdp-growth-forecast-upwards-to-6-9-for-fy23/articleshow/96023459.cms"> upgraded</a> its FY23 projections for India’s GDP growth to 6.9% from 6.5% , saying the economy was showing higher resilience to global shocks. Analysts highlight a few key factors that underscore the resilience of the Indian economy – robust tax collections, capacity utilisation reaching a 17-quarter high and forex reserves crossing the $550 billion mark once again. <cmsannotation type="cmsannotation" annotationid="Here are some factors that will shape India’s growth trajectory in 2023" comment="subhead" text="Here are some factors that will shape India’s growth trajectory in 2023">Here are some factors that will shape India’s growth trajectory in 2023</cmsannotation> <cmsannotation type="cmsannotation" annotationid="Revival of the capex cycle" comment="subhead" text="Revival of the capex cycle">Revival of the capex cycle</cmsannotation> Of the key indicators mentioned by analysts, capacity utilisation level has already shown an improvement – at 75%, it has hit a 17-quarter high. Capex spending by the government and listed companies has now hit an all-time high on a trailing 12-month (TTM) basis, and according to analysts at <keyword id="46909" type="General" weightage="80" keywordseo="icici-securities" source="Orion">ICICI Securities</keyword>, it will<a href="https://www.businessinsider.in/india/news/government-listed-private-companies-capex-to-touch-21-lakh-crore-in-fy23-icici-securities/articleshow/95858117.cms"> touch ₹21 lakh crore</a> in FY23. “The analysis clearly highlights multiple engines of growth starting to fire together, which would lend stability and visibility to capital outlay in the economy over FY22-26,” said a report by HDFC Institutional Research. <cmsannotation type="cmsannotation" annotationid="Rise in government’s infrastructure spends" comment="subhead" text="Rise in government’s infrastructure spends">Rise in government’s infrastructure spends</cmsannotation> In FY23 alone, the budget for infrastructure spending rose 35.4% when compared to FY22. The share of capex spending as a percentage of India’s GDP is projected to increase to 2.9% in FY23 from 2.5% in FY22. Two schemes – the <keyword id="8508344" type="General" weightage="80" keywordseo="national-infrastructure-pipeline" source="Orion">National Infrastructure Pipeline</keyword> (<keyword id="1238925" type="General" weightage="80" keywordseo="nip" source="Orion">NIP</keyword>) worth ₹111 lakh crore, and the PLI (production-linked incentive) scheme worth ₹2 lakh crore – will be the key drivers of the government’s capex growth, according to a report by Prabhudas <keyword id="150609" type="General" weightage="80" keywordseo="lilladher" source="Orion">Lilladher</keyword>. The NIP was announced for the 2020-25 period. Now, a report by the<a href="https://economictimes.indiatimes.com/news/economy/finance/high-capex-budget-likely-in-bid-to-offset-global-slump/articleshow/95868086.cms"> Economic Times</a> says that the critical sectors of railways, roadways and ports are expected to see a “significant” increase in Budget 2023 <cmsannotation type="cmsannotation" annotationid="Return of the foreign investors" comment="subhead" text="Return of the foreign investors">Return of the foreign investors</cmsannotation> While the first half of 2022 saw foreign investors fleeing the Indian market, the trend<a href="https://www.businessinsider.in/stock-market/news/foreign-portfolio-investors-flows-in-2022-in-india/articleshow/96223765.cms"> reversed</a> in the second half. Foreign portfolio investors (FPIs) had withdrawn ₹2.32 lakh crore from India’s equity and bond markets until June 2022. Since then (July-November), they have pumped in ₹92,763 crore, according to data from NSDL. “FIIs are now pouring money in domestic-facing sectors like banks and consumption stocks which are immune to global shocks and traction is apparent in terms of India’s credit growth and consumer spending,” said Hitesh Jain, lead analyst – institutional equities at <keyword id="2969453" type="General" weightage="80" keywordseo="yes-securities" source="Orion">Yes Securities</keyword>. <cmsannotation type="cmsannotation" annotationid="Rural revival and broad-based recovery in demand indicators" comment="subhead" text="Rural revival and broad-based recovery in demand indicators">Rural revival and broad-based recovery in demand indicators</cmsannotation> India’s rural economy is now showing signs of a revival, according to the readings of four key indicators – employment, credit offtake, auto sales, and trade, according to a<a href="https://www.businessinsider.in/finance/news/rural-recovery-underway-says-morgan-stanley/articleshow/94935646.cms"> report</a> by <keyword id="48670" type="General" weightage="80" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword>. “High-frequency data suggest that overall economic activity has been normalising over the past three months after remaining sluggish in the trailing 12 months. Our consolidated rural activity tracker shows a pickup in YoY terms over the last 3-4 months,” the report said. Another key driver of India’s economic growth next year will be a demand uptick. “We expect domestic demand indicators to exhibit broad-based recovery and to be the key driver of India’s growth trajectory amid global headwinds,” said Upasana Chachra, chief India economist, Morgan Stanley. (With inputs from PTI) SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/foreign-portfolio-investors-flows-in-2022-in-india/articleshow/96223765.cms">FPI flows in 2022 – a tale in two parts</a> <a href="https://www.businessinsider.in/stock-market/news/best-and-worst-performing-ipos-of-2022-in-india/articleshow/96160391.cms">Best and worst performing IPOs of 2022</a> <a href="https://www.businessinsider.in/business/corporates/news/two-adani-group-companies-rule-as-the-top-all-round-wealth-creators/articleshow/96109684.cms">Two Adani Group companies rule as the top all-round wealth creators – here are a few other unexpected entries</a>

Indian economy to outpace world average growth in 2023 – Can it duck global headwinds?

<ul><li>The post-COVID economic recovery of low-income households has been slow, according to a new report.</li><li> This has had a direct impact on the overall economic recovery of the country.</li><li> The report adds that it may take a few more quarters for growth to recover to full potential.</li></ul>The slow economic recovery of the low income households post Covid-19 pandemic has resulted in the overall economic recovery of the country, said <keyword id="66607" type="General" weightage="50" keywordseo="kotak-securities" source="Orion">Kotak Securities</keyword> Ltd. In a research report, Kotak Securities said, post Covid-19 pandemic, <keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword>'s economic recovery seems to be lukewarm on a three-year compounded annual growth rate (<keyword id="107168" type="General" weightage="80" keywordseo="cagr" source="Orion">CAGR</keyword>) basis. The major economic parameters reveal slow post-pandemic recovery, with gross domestic product (GDP), goods and services tax (GST) collections, electricity demand, credit growth and auto sales growing somewhat slowly as against the expectations. Kotak Securities attribute the weaker-than-expected recovery to the slow 'repair' in the income of low-income households. "It may take a few more quarters for growth to recover to full potential," the report said. India's 1QFY23 GDP grew at 1.3 per cent CAGR over the past three years, despite growing 13.5 per cent year-on-year (YoY). According to the report, the survey-based employment data suggests that India has not completely recouped all the jobs lost during the pandemic. "While formal job creation has been robust, the employment conditions remain frail in the lower-income groups, as employment-seeking under MNREGA is yet to reach pre-pandemic levels," the report said. It may take a few more quarters for employment and income to recover to pre-pandemic levels. The six month GST collections in FY23 logged a growth of 13.8 per cent on a three-year CAGR basis. The high wholesale price index (WPI) in the last couple of years may have helped higher GST collections in this period. The expectation is that the WPI will sharply trend lower over the next several months. Collections have grown at a higher pace than nominal GDP growth rate (9.5 per cent on a three-year CAGR), suggesting some widening of the tax base. On the industrial growth front, India's indicators look rosy on a yoy basis but lose their sheen when examined on a three-year CAGR basis. In particular, diesel consumption in 5MFY23 declined by 0.4 per cent and electricity demand grew at 4.7 per cent on a three-year CAGR basis. Meanwhile, gross fixed capital formation (GFCF) has seen a muted 2.2 per cent CAGR over the past three years, despite strong government and household investment. Household investment in real estate was a key driver, seeing a 14 per cent three-year CAGR in major cities, while the Central government capex increased at 23 per cent three-year CAGR. As such, industrial production and private-sector investment are yet to show a meaningful recovery. Private consumption has not seen much of a recovery, with private final consumption expenditure (PFCE) growing at 3.2 per cent on a three-year CAGR basis, Kotak Securities said. The shallowness of the recovery is prominent in the automobile sector, especially in two wheelers as their sales volumes have declined at six per cent CAGR over the past three years (5MFY23 over 5MFY20), while hatchback (entry segment) volumes have increased at 3.2 per cent CAGR in the same period. Air passenger traffic has also not seen a complete recovery in 5MFY23. "We note that retail credit growth has been resilient at 15.3 per c ent CAGR, but not enough to pick up the slack in overall bank credit growth," Kotak Securities said.

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