Stock Market Updates: Top Picks and Trends to Watch
A host of global and domestic brokerages have released fresh views on SBFC Finance, Tata Communications, DOMS Industries, PB Fintech ahead of Wednesday’s session. Analysts have also tweaked share price targets for some of these companies.
Key Pipeline Projects Indian CDMOs Are Working On
Revise project pipeline for Indian CDMOs and find most companies are working on sizable new projects. Among the new wins, believe Sai has added the most meaningful projects, followed by Piramal and Divi’s. Sai and Divi’s have the 100% revenue visibility on FY28 estimates and thus are also our top picks.
Overall Demand Trends
Overall demand trends have lagged expectations amidst challenging weather conditions. Festive uptick was not very encouraging either. All eyes are now on pre-season purchases starting end Q3 and during Q4. Channel inventory levels are still high driving working capital pressures at the dealer end. Build-up for the season will be a key monitorable.
Price Hikes and Regulatory Changes
Price hikes in high single digit due to new energy rating norms will likely be offset by GST benefits. Competitive landscape remains firm with significant capacity build-out which may weigh on margin/return profiles. Regulatory changes like QCO norms for compressors and new BEE ratings will be key watch outs.
SBFC Finance
SBFC Finance has built a niche in secured MSME finance. Geographically diversified network helps smooth out state-level volatility. Remains focused on cost efficiency, targeting a reduction in its cost-to-income ratio to below 30% over the next 3-4 years. Aspires to grow AUM at 5%-7% QoQ with improving cost ratios and RoE expansion.
Tata Communications
Tata Communications is deepening its CX suite. This acquisition to strengthen its CIS portfolio by integrating Commotion’s products with Kaleyra’s existing capabilities. Understand CIS is currently the main drag on overall segment profitability.
PB Fintech
PB Fintech is likely to defy skeptics yet again. Domestic outperformance an outcome of portfolio construct + a playbook perfected over the years. Europe, branded generics, and US re-entry to fuel export momentum. Key elements of the Unichem reset yet to play out.
Investment Trends
Premiumisation, wallet shift – themes to watch for future. Jewellery continues to shine. Resilience of premium alcobevs is noteworthy. Luxury / premium hospitality segment is a key beneficiary. Staples cos sharpening focus on premium segments. Rising incomes and shift in wallet share key themes to watch for future.
Cement Industry Trends
Cement price was lower by 0.5% MoM in Nov. QTD avg is soft at 1.5-2% QoQ decline, given cap on near term pricing due to new GST rollout. Checks suggest pricing may improve in Q4 with better demand. Do build in price recovery in Q4 amid demand recovery.
Conclusion
In conclusion, the Indian stock market is expected to be volatile in the coming session. Investors should keep an eye on the top picks from brokerages and trends to watch out for. SBFC Finance, Tata Communications, and PB Fintech are some of the stocks that are expected to be in focus.