Investing

Gold has always been a symbol of wealth and security, but today, investing in gold means something other than stashing away heavy jewelry, bars, and coins. Enter gold funds—an innovative and hassle-free way to add the shine of gold to your investment kitty. 

Gold has always been a symbol of wealth and security, but today, investing in gold means something other than stashing away heavy jewelry, bars, and coins. Enter gold funds—a smart and hassle-free way to add the shine of gold to your investment kitty. 

Are you curious about Gold funds and why you should consider them? This article shall answer your queries and give you more details on the basics and purpose of Gold Funds in India.

What are gold funds?

A type of mutual fund, gold funds directly or indirectly invest in gold savings. Generally, investments are made in gold-related stocks, such as companies that produce and distribute gold, physical gold, and mining companies’ stocks.

Gold funds are a convenient way to invest in an asset without purchasing the commodity in its physical form. These are open-ended investments connected to gold Exchange Traded Fund (ETF) units. Gold is a fundamental asset; thus, its value depends directly on its price.

Gold funds are a convenient way to invest in an asset without purchasing the commodity in its physical form. These are open-ended investments connected to gold Exchange Traded Fund (ETF) units. Gold is a fundamental asset; thus, its value depends directly on its price.

What are the benefits of investing in gold funds in India?

There are several advantages to investing in gold funds. Let us find out as mentioned below:

● Protection from Inflation: One significant advantage is that you can grow your investment while protecting your money from inflation with gold sector funds.  And this is an intelligent way to invest in long-term goals. Since gold has a limited supply, its prices have steadily risen, making it a solid option for long-term investing.

● Flexibility of Investments: Investors enjoy the flexibility to inclusively monitor their mutual fund investments with their gold funds. There are alert services by SMS messages, a 24/7 phone support system, and modern modes of communication like websites, chat, and email.

● Easy to Track: To track their portfolio values whenever needed, investors can check the current fund value online or call the toll-free number of the fund house. This tracking strategy gives investors a better idea of transacting their gold funds.

● Liquidity: Investors are attracted by the ability to redeem mutual fund units at par value at any time. For instance, if someone invests Rs. 50,000 and decides to stop in the future, they can withdraw the total amount. This easy and convenient reclamation feature makes gold funds accessible to all types of investors.

● Safer Investment: Gold has always symbolized a secure and traditional investment choice for investors. Gold funds have the benefits of accessibility, liquidity options, and low cost; hence, they have been a popular choice with investors.

What is the Purpose of Gold Funds?

The return of the best gold funds can even outgrow the actual price of the precious metal itself, creating a lucrative opportunity for investors.

The key purpose of gold sector funds is to create wealth during the investment period and provide a safety buffer against market collapse. Gold’s varying prices significantly affect stock performance. For instance, even with the slightest change in gold’s global market price, the stock return substantially changes. 

Investors sometimes use a share market advisory to get help to mitigate potential stock market losses. Various factors influence the gold fund’s performance, including the market demand for gold and broader economic conditions.

For a long-term gold mutual fund (8 years or longer), an investor can receive a return calculated based on the current market’s gold prices. If the price of gold increases at the time of redemption, the return would be significant for the investor.

Who should invest in Gold Funds?

Gold funds allow you to invest in gold without physically owning the metal. Here’s a look at who might consider investing in them:

• Diversifiers: Gold plays a crucial role as a safe-haven asset, offering stability in market uncertainty. It helps diversify portfolios by balancing risk, making it particularly valuable when market volatility increases. In equity asset management, gold effectively counterbalances to equities, which are often more volatile. Portfolio managers can reduce overall risk by including gold with traditional equity investments while seeking long-term growth. 
• Long-term Investors: Gold has a proven track record of maintaining its value over time, making it an appealing option for investors with a long-term perspective. For those looking to diversify their portfolios, investing in top gold stocks can provide exposure to the gold market. These stocks represent gold mining and production companies, often benefiting from rising gold prices. 
• Risk-Averse Investors: Gold appeals to more conservative investors when seen as less risky than stocks and bonds.
• Inflation Hedgers: Gold is a hedge against inflation, with its value typically increasing as prices rise.
• Currency Hedgers: It protects against currency risks, especially during economic uncertainty.
• Investors Seeking Gold Exposure: Gold funds provide a convenient way to invest in gold without the challenges of physical storage.

What are the benefits of investing in gold vs stock?

The table below categorizes the investing in gold vs stock benefits.

Conclusion

Gold sector funds offer a unique advantage by hedging against market uncertainties. Conservative investors prefer gold funds in India as they help safeguard against economic downturns and inflation. By including gold sector funds in a balanced investment, investors can add a layer of protection and stability.

FAQ

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

We live in an age where markets are becoming more complex and unpredictable, and navigating investments alone can feel daunting. That’s where fund managers come in—experts who understand the workings of the market and make informed decisions on your behalf. But have you ever wondered why their expertise is crucial for your financial success?

In this article, we shall explore what fund managers do and who are the top fund managers you should know about. Let’s dive into the minds behind the numbers.

Who is a fund manager?

A fund manager is a financial expert who executes investment strategies and oversees the management of mutual funds, hedge funds, trust funds, pension funds, and other financial assets on behalf of various investors.

They also play a vital role in researching and selecting the most suitable stocks, bonds, or other securities that align with the fund’s strategy, as detailed in its prospectus. After that, fund managers execute buying and selling decisions to improve the portfolio. A fund can be managed by one person, by two people as co-managers, or by a team of three or more analysts and traders who assist in these tasks.

Fund managers typically earn fees based on a percentage of the fund’s average assets under management (AUM). 

Understanding Fund Managers

Fund managers are skilled at managing portfolios and making informed decisions on behalf of investors. With their proficiency and market insights, they assist individuals and enterprises in achieving their financial goals in sync with market conditions.

While a fund’s performance may have much to do with market forces, the manager’s skills are also a contributing factor. A highly trained manager can lead their fund to beat its competitors and their benchmark indexes. This kind of fund manager is an active or alpha manager, while those who take a laidback approach are called passive fund managers.

Fund managers must have good business, math, and people skills since they manage a team of investment analysts who oversee an investor’s financial assets and direct their activities.

Qualifications and Skills required to be a Fund Manager

A combination of academic qualifications, technical skills, and soft attributes is essential to become a successful fund manager.

Qualifications:

• Bachelor’s Degree: A bachelor’s degree in finance, economics, accounting, or a related field is typically required.
• CFA Charterholder: While not always mandatory, the Chartered Financial Analyst (CFA) designation is highly respected in the industry and can significantly enhance career prospects.
• Master’s Degree: A master’s degree in business administration (MBA) specializing in finance can provide a deeper understanding of financial markets and investment strategies.

Skills:

• Financial Analysis: Strong analytical skills in evaluating financial statements, market trends, and investment opportunities.
• Risk Management: The ability to assess and manage investment risks to protect investors’ capital.
• Portfolio Management: Knowledge of portfolio construction, diversification, and rebalancing techniques.
• Market Research: The ability to gather and analyze market data to identify potential investment opportunities.
• Communication: Excellent verbal and written communication skills to interact with clients, investors, and colleagues.
• Problem-Solving: The ability to think critically and solve complex financial problems.
• Technology Proficiency: Familiarity with financial software and tools to analyze data and manage portfolios efficiently.
• Ethical Conduct: Adherence to ethical standards and regulations in the financial industry.
• Adaptability: The ability to adapt to changing market conditions and investment strategies.
• Leadership: Strong leadership skills to manage teams and guide investment decisions.

Responsibilities of Fund or Money Managers

• Research and Security Selection: Money managers identify and choose the most suitable stocks, bonds, or other securities that align with the fund’s investment strategy.
• Actively Managed vs. Passively Managed Funds: Actively managed funds aim to exceed a benchmark by frequently making buy/sell decisions, whereas passively managed funds seek to match an index’s performance with low trading activity.
• Performance Reporting: Fund managers generate performance reports to inform clients about the fund’s progress and returns.
• Client Engagement: They create materials for potential clients and identify investors or companies that fit the fund’s investment approach.
• Strategy Alignment: Fund managers ensure that their investment decisions align with the fund’s objectives and long-term strategy.

Top 10 Fund Managers in India

Here is a table that presents the details of India’s top 10 fund managers.  It makes it easier to compare the key points at a glance.

Factors to Remember While Choosing a Fund Manager:

Adaptability to Strategy

A fund manager who adapts their investment strategies based on market conditions ensures consistent management of funds. This flexibility helps them stay aligned with changing trends.

Evaluate Past Performance Carefully

A careful evaluation of past performance shows a fund manager’s methodical approach. It reflects their ability to navigate challenges and find opportunities within the market.

Understand the Manager’s Risk Tolerance

Select a fund manager whose risk tolerance matches your own, whether conservative or aggressive. This alignment will tell you how they handle market volatility.

Focus on Undervalued Stocks

A skilled fund manager can spot undervalued stocks due to their deep understanding of market trends. This expertise helps them find opportunities that others might miss.

Mutual Funds vs. Equity Investing

Fund managers use different strategies for mutual funds vs equity investing. A mutual fund manager does not have to discuss his decisions with the investor. However a fund manager of an individual investor has to discuss his or her ideas before making any decision.

Share Market Advisory Expertise

Choosing a fund manager with a share market advisory team may be necessary because they provide expert insights on market trends. This guidance may help you make informed decisions and enhance the effectiveness of your investment strategy.

Avoid Big Names for Better Focus

Avoid being influenced by large fund houses. They often highlight asset gathering, which can lead to average results. On the other hand,  smaller, specialized managers may have a more focused approach, making them better at finding hidden opportunities like undervalued stocks.

Conclusion

Fund managers play a crucial role in steering the complex world of investments through actively or passively managed funds.

Their success lies in their expertise in selecting securities, managing portfolios, and communicating with clients.  Understanding these differences can help investors make informed decisions and choose the right fund manager to meet their financial goals.

FAQ

India’s pharmaceutical industry is a global leader, known for its resilience and innovation, especially after the pandemic. It ranks third worldwide in volume and 14th in value. The country’s pharma sector meets over 50% of the global vaccine demand, 40% of the U.S. generic drug demand, and supplies 25% of all medicines in the UK. Plus, the market is expected to grow at a 12.5% CAGR, reaching approximately Rs.1.09 lakh crore (USD 130 billion) by 2030. But is it following the projected growth trajectory?

The pharma industry is currently following a growth trend. The NIFTY Pharma index, a representation of India’s pharma sector, has grown nearly 53.80% in the last 12 months as of 30th August 2024, comfortably outnumbering the NIFTY50 returns.

As of 2nd September 2024, the index had a 5-year CAGR growth rate of 23.6% and a 1-year CAGR of 52.8%. Moreover, it has outperformed NIFTY50 by a decent margin. Why? 

In recent quarters, the sector has benefited from several positive factors: better performance in the US generics market, strong results in branded markets, lower raw material costs, and increased market share for newly launched products. Plus, to some extent, the reason for growth can be attributed to the fine-performing top ten companies operating in the pharma sector. 

Top 10 Pharma Stocks As Per Market Capitalization:

5 Top Pharma Stocks

Sun Pharma:

Sun Pharmaceuticals is a leading global specialty generics company with a worldwide presence in specialty, generics, and consumer healthcare products. They operate 41 manufacturing facilities worldwide and deliver high-quality, affordable medicines to around 100 countries. In FY2024, Sun Pharma invested 6.7% of its global revenues into Research and Development (R&D). They market 26 specialty products globally, contributing approximately 18% to their consolidated revenues for FY2024. 

Global Specialty, their new growth engine, increased from 7% of consolidated revenues in FY2019 to 18% in FY2024. Their emerging market sales grew by 9.1% to Rs.8600 crore, contributing 18% to consolidated revenues, while global specialty revenues saw a 19.3% growth to Rs.8714.69 (USD 1039 Million). Moreover, their June 2024 quarterly results recorded a net profit of Rs.2860.5135.62 crore in FY20254. 

Divis Laboratories Ltd.:

Divi’s Laboratories Ltd., based in Hyderabad, India, has been a leading name in the pharmaceutical industry for over 30 years. With two manufacturing units, Divi’s specializes in producing high-quality APIs (Active Pharmaceutical Ingredients), Intermediates, and Registered Starting Materials, serving over 100 countries. The company operates through three primary business segments: Generic APIs, Custom Synthesis, and Nutraceuticals. Its world-class manufacturing units boast a combined capacity of around 14,600 M³, offering a diverse portfolio of 160 products across various therapeutic areas. 

Divis Laboratories also has two subsidiaries: one in New Jersey, USA, and another in Basel, Switzerland, to better serve its nutraceutical customers in those regions. Regarding the recent financials, while the company’s net profit margin decreased to 19.70% in FY2024 from 22.67% in FY2023, its revenue from operations rose to Rs.7,845 crore. Additionally, Divi’s saw a year-on-year increase in net profit for the quarter ending June 2024, reaching Rs.430 crore.

Cipla Limited:

Cipla, a leading Indian pharmaceutical company, was established in 1935. It operates through three central units: APIs, respiratory, and Cipla Global Access. Its largest market is India, followed by Africa and North America. Cipla is the third-largest pharmaceutical company in India and leads the pharmaceutical prescription market in South Africa. It is also a major exporter, particularly to emerging markets and Europe. The company’s 46 manufacturing sites worldwide produce over 1,500 products in over 50 dosage forms, serving 78 markets.

In FY2024, Cipla gained approval from CDSCO to market the novel antibiotic plazomicin in India. It also partnered with Sanofi India to distribute CNS products and collaborated with CSIR-CDRI to co-develop an innovative ophthalmic solution. Financially, Cipla saw a 13% YoY revenue growth to Rs.25,774 crore, with a ROCE of 31%. The company reduced its debt to Rs.247 crore and earned a profit of Rs. 4,15422 crore, with a PAT margin of 16%.

Torrent Pharmaceuticals Limited:

Torrent Pharmaceuticals Limited, known as Torrent Pharma, is the flagship company of the Torrent Group. It pioneered niche marketing in India and is a top name in cardiovascular (CV), central nervous system (CNS), vitamin mineral nutrients (VMN), and gastrointestinal (GI) segments. Torrent Pharma also has a strong presence in dermatology, diabetology, pain management, oncology, and gynecology. The company operates globally, reaching over 40 countries through its 8 manufacturing units in India.

With 72% of its revenues from branded generics and a focus on chronic therapeutic areas, Torrent Pharma has carved out a unique position in the global pharmaceutical market. Besides, the strategic alliance with Zydus Lifesciences Ltd further strengthened its gastroenterology portfolio. It ranked as the 5th largest company in the Indian Pharmaceutical Market (IPM) with a revenue of Rs.10,728 crores in FY2023-24. The Indian market contributed 53% of these revenues. The company spent Rs.527 crores on R&D, filed 38 patents, and delivered a net profit of Rs.1,656.38 crores.

Dr Reddys Laboratories Limited:

Dr. Reddy’s Laboratories Ltd, founded in 1984, is a leading pharmaceutical company in India. It offers a range of products, including Active Pharmaceutical Ingredients (APIs), generics, biosimilars, and custom pharmaceutical services (CPS). With over 400 high-quality generic drugs in 76 countries, the company leverages its expertise in active ingredients, product development, regulatory understanding, and a streamlined supply chain. 

Dr. Reddy’s became the first Indian pharma company in the Dow Jones Sustainability World Index 2023 and S&P Global’s Sustainability Yearbook 2024, ranking in the top 10%. In 2023-24, it partnered with Nestlé India to introduce health science nutraceuticals across India and other regions. Additionally, it collaborated with Sanofi to expand vaccine access in India. The company’s financial strength is evident, with a total net worth of Rs.28,05560 crore and total revenue of Rs.28,9057,920 crore in FY2024.

The Indian pharmaceutical sector has grown at a CAGR of 9.43% in the last nine years and currently holds 5.71% of the global pharmaceutical market. Considering these figures and the related projections, the sector is poised to grow shortly. Besides, the government is giving a fair push to this industry through initiatives like PM Bhartiya Janaushadhi Pariyojana and the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS). However, irrespective of its growth prospects, consider doing thorough research and seeking expert advice before investing in any of the top pharma stocks. 

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Introduction:

India’s focus on infrastructure development makes investing in related company stocks a great opportunity. This includes stocks in infrastructure, metal companies, and material producers. With fast industrial growth, infrastructure projects, and rising demand, the metal industry in India remains promising for investors. In this article, let’s get an overview of the Indian metal industry and do a brief metal stock analysis of the top companies in the metal sector stocks.

What are metal stocks?

Metal stocks are shares of companies that explore, produce, process, or distribute metals like steel, aluminum, copper, and zinc. Companies in this sector may run mines, smelters, refineries, or other facilities involved in metal extraction and processing. Investing in metal stocks allows you to benefit from the metal industry’s performance without physically owning or storing metals, making them a popular choice for adding commodity exposure to your portfolio.

However, with the benefit of exposure comes the risk of volatility due to changes in the demand or supply of commodities, price fluctuation, and geopolitical factors affecting the global market. So, before you shortlist the companies for investment or head to find an undervalued stock for long-term investment, get a thorough idea of the market and overall sectoral performance. One way metal stock analysts track the sector’s progress is by watching the NIFTY Metal index on the NSE (National Stock Exchange). 

The NIFTY Metal index reflects the cumulative performance of 15 metal stocks on the NSE. As of 30th August 2024, the NIFTY Metal index posted a one-year total return of 41.94%, outperforming the NIFTY50 index (32.64%). 

Is development the only reason why metal stocks are outperforming? Let’s answer this with a synopsis of the Indian metal market.

Overview of the Metal Sector:

India’s metal industry is crucial to the nation’s construction and infrastructure growth. Its strategic location allows India to export metals, especially to rapidly growing Asian markets. The industry offers strong investment opportunities, supported by the National Mineral Policy 2019 and the Mines and Minerals (Development and Regulation) Amendment Act 2021. With rich reserves of minerals like bauxite, iron ore, and manganese, the sector is positioned for further reform, driven by initiatives like Smart Cities and Make in India. In fact, the Indian metal sector is expected to grow at a rate of 8% to 9% annually. 

The metal industry is vital to India’s economy owing to its contribution to GDP, job creation, and foreign exchange reserves. It also plays a key role in India’s ambition to become a USD 5 trillion economy by 2024-25. The India Metal Fabrication Market is currently worth USD 20.89 billion (2023) and is expected to grow to USD 28.46 billion by 2028. Investing in the metal sector can be a way to support the country’s growth. Additionally, metal stocks offer protection against inflation, as precious metals like silver, palladium and gold tend to retain their value, providing a reliable hedge when prices rise.

Top Metal Stocks List (2024)

As of 10th September 2024, the top metal stocks of India, as per the market capitalization, are as follows-

Data taken from NSE, Screener, and Moneycontrol)

Overview of Top Metal Stocks:

JSW Steel Limited:

JSW Steel Limited, an India-based company, manufactures and sells iron and steel products. It operates as an integrated manufacturer, offering a wide range of steel items. Its product lineup includes flat and long steel, cold-rolled coils, sheets, galvanized and galvalume products, tinplate, and various steel bars. The company’s popular brands include JSW Radiance, JSW Colouron+, JSW Everglow, JSW Pragati+, JSW Vishwas, and JSW Vishwas+. With a global presence in 100+ countries, JSW Steel remains a key player in the industry. In FY2024, it reported revenue of Rs.1,75,006 crore and a net profit of Rs.8,973 crore, with a return on capital employed (ROCE) of 13.1%. 

Hindustan Zinc Limited:

Hindustan Zinc, incorporated in 1966, is the world’s 2nd largest integrated zinc producer and the 5th largest silver producer globally, with an annual silver production of about 714 tonnes. It holds a 75% share of India’s zinc market. Headquartered in Zinc City, Udaipur, the company operates zinc-lead mines and smelting complexes across Rajasthan. It’s a subsidiary of Vedanta Limited and runs five zinc-lead mines, four zinc smelters, a lead smelter, and a silver refinery, among others. Hindustan Zinc also operates thermal, solar, and wind power plants. In FY2024, it posted a revenue of Rs.28,934 crore and maintained a healthy dividend payout of 151%.

Tata Steel Limited:

Tata Steel Ltd, founded in 1907, is Asia’s first integrated private steel company. It covers the entire steel production process, from mining iron ore and coal to distributing finished products. The company operates in four segments: industrial products, projects and exports, automotive and special products, and branded products and retail. Its offerings include galvanized steel, hot-rolled and cold-rolled products, wire rods, rebars, and more. Some of its brands include Tata Structura, Tata KOSH, Tata Steelium, Ferromag, and Galvano. In the Q1FY25, Tata Steel reported revenue of Rs.54,771 crore and a net profit of Rs.919 crore.

Vedanta Limited:

Vedanta Ltd is a natural resource company involved in exploring, extracting, and processing minerals and oil & gas. It produces and sells zinc, lead, silver, copper, aluminum, iron ore, and oil & gas. The company operates in India, South Africa, Namibia, Ireland, Liberia, and the UAE. It also has commercial power generation, steel manufacturing, port operations in India, and glass substrate manufacturing in South Korea and Taiwan. After acquiring a Nickel and Cobalt plant in Goa, Vedanta became India’s sole Nickel producer. It holds 64.9% of Hindustan Zinc and 53.9% of Sterlite. In FY2024, Vedanta reported revenue of Rs.143,727 crore and a net profit of Rs.7539 crore.

Hindalco Industries Limited:

Hindalco Industries Ltd., a key part of the Aditya Birla Group, was founded in 1958. It focuses on producing aluminium and copper, along with aluminium sheets, extrusions, and light-gauge products for packaging, including cans and foils. The company ranks among the top five global aluminium producers based on shipments, known for its low-cost production and integrated value chain. Its copper division operates one of the largest single-location copper smelters globally. As of the Q1FY25, , Hindalco reported a revenue of Rs.57,013 crore, a net profit of Rs.3,074 crore, and a return on capital employed (ROCE) of 11.3%.

Bottomline:

Investing in metal stocks in India can be attractive due to the country’s industrial growth and infrastructure development, which boosts demand for metals. Steel and aluminum are crucial in construction and manufacturing, especially with rising urbanization. Government initiatives like “Make in India” also support the potential of metal stocks as they align with India’s economic growth. However, before investing, think about your risk tolerance and goals. Be mindful of factors like global economic conditions, supply and demand, government policies, and industry trends when making decisions. You can consider consulting a registered stock market advisor for better sector insights. 

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

The market had a weak start on Wednesday due to a drop in FII inflows and a shift of funds to other emerging markets with cheaper valuations. However, things turned around later. In the final hour of trading, the market saw a strong comeback. This recovery helped both the Nifty 50 and Sensex reach new milestones despite the earlier dip. Consequently, SENSEX touched a new all-time high at 85,247 and closed for the first time above 85,000 at 85,169 points. Even NIFTY closed above 26,000 for the first time at 26,004. Amidst the surge in the indices, a few stocks made it to the list of top performers for the day. 

As the market opens at 9:00 AM today, we present 20 stocks to consider adding to your watchlist. Here are ten stocks with the highest trading volume and ten stocks based on their performance at yesterday’s market close. 

Top 10 stock performers today from NIFTY 500

Based on the closing figures of 25th September 2024:

(source: NSE on 25th September 2024)

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. Past performance is not indicative of future results.

Top 5 stock performers today from NIFTY 500

Saregama India Limited:

Saregama, India’s oldest music label (founded in 1902), is evolving into a pure content company, riding the global consumption wave. Since 2017, it’s been making waves with Saregama Carvaan and Yoodlee Films. As the only entertainment company in India with intellectual property across music, films, web series, TV serials, and more, Saregama covers both digital and physical platforms, with business models in licensing, advertising, and retail. Impressively, it owns around 50% of all music ever recorded in India. With a robust digital presence, it has 239 million followers across YouTube, Instagram, and Facebook. As of FY 2023-24, Saregama’s extensive music library holds over 150,000 tracks, with 9,700 added annually. It has a network of 100+ streaming platforms and 120+ artists/influencers. In FY 2024, it reported Rs.803 crore in revenue and Rs.196.99 crore in net profit with no debt. (Source: Annual Report)

ZEE Entertainment Limited:

ZEE Entertainment, founded in 1982 by Subash Chandra, is a major player in the media and entertainment industry. It reaches over 1 billion people, offering content across various genres, languages, and platforms. ZEE’s core activities include broadcasting satellite TV channels, selling space on other channels, and distributing media content like films and music rights. With over 5,000 movie titles and 230+ originals on ZEE5, it engaged 1,300+ million viewers by FY2023. In Q1 FY25, ZEE’s total income was Rs.2,149.52 crore, a slight dip from the previous quarter but a 7.57% year-on-year rise. Despite a modest 4.4% return on equity, it posted a net profit of Rs.118.01 crore in FY2023-24. (Source: Annual Report)

EClerx Services Limited:

EClerx Services Ltd, founded in 2000, offers business process management, automation, and analytics to Fortune 2000 companies across sectors like financial services, retail, media, and technology. They provide advanced analytics, automation, technical support, and digital care services, helping clients boost sales and retention while cutting costs. In FY2024, EClerx reported an operating income of Rs.2925.54 crore, a 10.5% growth. PAT stood at Rs.511.73 crore. The company’s stock has seen a 25% CAGR over five years, benefiting shareholders over and above the returns through dividends and buybacks. In the June 2024 quarter, operating revenue rose 14.2% YoY to Rs.781.9 crore, with an EBIT of Rs.155.6 crore. (Source: Annual Report)

Tata Communications Ltd.:

Tata Communications, originally incorporated as VSNL on March 19, 1986, was taken over by the Tata Group in 2002 after the Government of India sold a 25% stake. It is a global leader in digital ecosystems, providing managed solutions to multinational companies and service providers. With a presence in emerging markets and a global infrastructure, Tata Communications partners with 300 Fortune 500 companies, offering communication, cloud, mobility, and data center services. In 2008, the company was renamed Tata Communications. It operates the world’s only fully-owned fiber-optic subsea network and is the largest wholesale voice provider globally. Its services range from voice and data transmission to mobile roaming and TV uplinking. In FY2024, it acquired the remaining 41.9% stake in Oasis Smart SIM Europe. Revenue for FY2024 was Rs.20,969 crore, with Rs.17,181 crore from data and a PAT of Rs.968 crore. The dividend per share stood at Rs.16.70. (Source: Annual Report)

Mahindra Lifespace Developers Ltd:

Mahindra Lifespace Developers Ltd, founded in 1999, is engaged in developing real estate, residential projects, and commercial complexes. Through its subsidiary companies, it also takes part in infrastructure projects, including SEZs and Industrial Clusters. The company’s consolidated sales for the year reached Rs.2,69,779 lakh, reflecting a 19% growth over FY 2022-23. It launched projects covering 4.42 million sq. feet, a 39% increase from the previous year. The projected GDV of acquisitions during the year stands at Rs.4,40,000 lakh, marking a 38% rise. In FY 2023-24, Mahindra Lifespace successfully executed eight launches, leading to Rs.2,32,819 lakh in pre-sales. As of FY 2024, the company has delivered and is working on 53 projects. Its revenue stood at Rs.123.43 crore, with an ROCE of -3% and an asset turnover ratio of 1.54. (Source: Annual Report)

Top 5 volume gainers from NIFTY 500

Based on the trade volume of 25th September 2024 vs the past one week’s average:

(source: NSE on 25th September 2024)

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. Past performance is not indicative of future results.

Understanding the stocks of the list:

Easy Trip Planners Limited:

Easy Trip Planners Ltd. began in 2008 as a bootstrapped company and has remained profitable since. It operates through three channels: B2B2C, B2C, and B2E, offering access to over 400 international and domestic airlines, more than 10 lakh hotels, train and bus tickets, and taxi rentals in major Indian cities. In FY2023, its Look-to-book ratio was 3.88%, with a booking success rate of 98%. The company reported revenue of Rs.590.57 crore and a net profit of Rs.103.17 crore. For the June 2024 quarter, total income was Rs.109.63 crore, with a net profit of Rs.34.46 crore, up from Rs.26.07 crore in June 2023. (Source: Annual Report)

Craftsman Automation Limited:

Craftsman Automation Limited, founded in 1986, is a strong player in the engineering space. Headquartered in Coimbatore, it runs multiple manufacturing facilities across India. Craftsman produces parts and subassemblies for e-commerce, pharmaceuticals, automotive, and engineering sectors. In FY2024, the company achieved a consolidated revenue of Rs.4,452 crore. Of this, 17% came from industrial and engineering, Rs.740 crore (35%) from powertrain, and Rs.2,154 crore (48%) from aluminum. Exports contributed 4% to the total revenue. The company’s net worth also increased to Rs.1,752 crore in FY2024, up from Rs.1,438 crore the previous year. (Source: Annual Report)

Syrma SGS Technology Limited:

Syrma SGS Technology Limited, founded in 2004 in Chennai, focuses on electronics manufacturing services (EMS). It specializes in precision manufacturing for various industries, offering end-to-end services from concept development to large-scale production. Syrma SGS helps OEMs through co-creation and product realization, excelling in high-mix volume production. The company exports to over 20 countries. In FY2024, it acquired a 51% stake in Johari Digital Healthcare, a leader in MedTech device development, and merged its subsidiaries, SGS Tekniks and SGS Infosystems. Syrma SGS reported a total revenue of Rs.3,212.4 crore, growing 54% year-on-year. Its profit after tax (PAT) was Rs.124.3 crore, with 26% of revenue coming from exports, totaling Rs.811.7 crore. The return on capital employed (RoCE) was 9.9%. (Source: Annual Report)

HEG Limited:

HEG Ltd stands out as one of India’s leading manufacturers and exporters of graphite electrodes. It runs the world’s largest integrated graphite electrode plant, producing 80,000 tons each year. As part of the LNJ Bhilwara Group, HEG also explores IT services, power, and textiles. The company offers various grades of graphite electrodes, including UHP, SHP, and HP, exporting 65-70% of its output to 35 countries for over two decades. In June 2024, HEG reported revenue of Rs.571.46 crore, a decrease from Rs.671.43 crore in June 2023. Its net profit also fell to Rs.23.04 crore from Rs.139.08 crore. Additionally, HEG’s stock price dipped by 5.3% over the past year as of 25th September 2024. (Source: Annual Report)

Gland Pharma Ltd.:

Founded in Hyderabad in 1978, Gland Pharma started as a contract manufacturer of liquid parenteral products. Today, it’s one of the largest injectable-focused companies, operating in over 60 countries, including the U.S., Europe, Canada, Australia, and India. With a business-to-business (B2B) model, Gland Pharma excels in developing, manufacturing, and marketing complex injectables. Promoted by Shanghai Fosun Pharma, Gland Pharma has seen rapid growth across the value chain. In FY2024, they launched 89+ products in core markets, with nearly 100 crore units of finished formulation capacity. Revenue from operations reached Rs.5664.7 crore, growing 56% year-on-year, and profit after tax (PAT) was Rs.772.5 crore with a 14% PAT margin for FY2024. The company invested Rs.177.4 crore in R&D and maintained a low debt-to-equity ratio of 0.04. As of FY2024, the company’s net worth grew at a 25% five-year CAGR, reaching Rs.8723.8 crore. (Source: Annual Report)

It is common that your asset allocation may have splurged during such a surge because of the temporarily outsized returns. However, before rebalancing immediately, thoroughly consider the market factors and their possible duration of sustenance to avoid any loss situation. 

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Indian Energy Exchange (IEX), a powerhouse in trading electricity and renewable energy, took a major hit on Tuesday. The IEX share price dropped 11.56% to an intraday low of Rs 211.60. This sharp drop followed a 52-week high of Rs 244.35, sending shockwaves through the market. What could have caused such a dramatic reversal of fortune, especially in a seemingly thriving company? Let’s explore the underlying factors that led to IEX’s significant drop.

Market Coupling Fears

The primary reason behind IEX’s decline appears to be growing concerns about market coupling. This refers to a system that aims to establish a uniform market clearing price for electricity across all exchanges operating in a region.

A news report suggesting the imminent implementation of market coupling sent shockwaves through the market. This development poses a potential threat to IEX’s current market dominance, as it could lead to increased competition and a reduction in its market share. (Source: Moneycontrol)

Understanding Market Coupling

Market coupling is a mechanism used in energy markets to establish a single, uniform price for electricity across different trading platforms. This means that buyers and sellers can trade electricity at the same price regardless of the exchange they are using.

How does market coupling work?

• Combining Bids: Market coupling systems combine buy and sell bids from all participating exchanges into a single pool.
• Determining a Clearing Price: A market clearing price (MCP) is then calculated based on the supply and demand dynamics of the combined pool.
• Allocating Trades: Trades are allocated to buyers and sellers based on their bids and the MCP.

Why is market coupling important?

• Efficiency: It can lead to a more efficient allocation of electricity by ensuring that it is traded at the most competitive price.
• Competition: Market coupling can increase competition among exchanges, potentially leading to lower prices for consumers.
• Integration: It can facilitate the integration of different electricity markets, enabling cross-border trade and promoting regional cooperation.

Impact on IEX

IEX, currently the dominant player in India’s power exchange market, could face challenges from market coupling. The introduction of a single clearing price could reduce its market share and increase competition from other exchanges.

IEX’s Past Performance

Despite the recent decline, IEX has demonstrated strong performance in the past six months, gaining 57.91%. This surge highlights the company’s underlying strength and potential for growth. However, the sudden downturn raises questions about the factors influencing its current trajectory. 

Government’s Push for Market Coupling

• Government Priority: The Indian government is actively pursuing the implementation of market coupling, a mechanism aimed at creating a unified electricity market. The Power Ministry has prioritized this initiative and directed the Grid Controller of India to expedite the pilot study.
  
• Pilot Study and Implementation: Under the guidance of the Central Electricity Regulatory Commission (CERC), the Grid Controller of India is conducting a comprehensive pilot study to assess the technical feasibility and potential benefits of market coupling. This study is expected to be completed by the end of the current month. Following the pilot study, CERC will evaluate the findings and determine the appropriate timeline for implementing market coupling.
  
• Current Market Structure: India currently has three power exchanges: IEX, Power Exchange India Limited (PXIL), and Hindustan Power Exchange Limited (HPX). These exchanges operate independently, collecting their own buy and sell bids and setting individual market clearing prices (MCPs). While the MCPs across these exchanges are generally similar, there can be slight variations.
  
• IEX’s Role: Indian Energy Exchange (IEX) is a leading platform for the trading of electricity, renewable energy, and certificates. It offers various trade markets, including day-ahead, term ahead, real-time, and cross-border electricity trade, as well as green energy markets.

(Source: Economic Times)

Market Reaction and Volume

The news of market coupling triggered a significant sell-off in IEX shares, leading to a sharp decline in the stock price. Investors, reacting to the potential implications of market coupling on IEX’s dominance, rapidly sold their shares, resulting in a surge in trading volume.

• Sharp Price Decline
  On Tuesday, the IEX share price, which scaled its 52-week high of Rs 244.35 in intraday trade, eventually settled 11.56 per cent lower at Rs 211.60. This morning, it slipped further to Rs. 203.9 around 11 a.m. Yesterday’s trading volume was exceptionally high, with over 40.53 lakh shares changing hands, significantly surpassing the previous two weeks’ average of 6.49 lakh. This surge in volume indicates the strong interest and concern among investors regarding the potential impact of market coupling.

• Market Capitalization Takes a Hit
• The market capitalization of IEX also took a hit, falling to Rs 19,195 crore. The stock’s 52-week high of Rs 244.35 was far surpassed, with the stock closing 14.30% lower for the day. This made IEX the top loser on the BSE for the session.
  
• Impact on NSE
• The heightened trading activity extended to the National Stock Exchange (NSE), where approximately 5.10 crore IEX shares were traded. This surge in volume underscores the market’s reaction to the news of market coupling and its potential implications for IEX.

Technical Analysis

From a technical perspective, IEX’s stock was trading in the overbought zone, as indicated by its relative strength index (RSI) of 79.8. This suggested that the stock might be due for a correction. Additionally, the stock’s beta of 1.4 indicates high volatility, which could contribute to sharp price swings.

Expert Opinions

Analysts have expressed mixed views on IEX’s future prospects. While some believe that the stock may experience further declines in the short term, others maintain a positive long-term outlook.

Conclusion

IEX’s sharp decline on Tuesday was primarily driven by concerns about market coupling and its potential impact on the company’s market share. While the short-term outlook may be uncertain, IEX’s long-term fundamentals and the government’s push for market reforms could influence its future trajectory. Investors will need to closely monitor developments in the power sector to assess the potential implications of market coupling on IEX’s business.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

The Fed rate cut, followed by the Chinese central bank announcing several measures to support the slowing economy, positively impacted the Asian markets. Almost all major Asian indices are trading with a positive bias. 

However, if the US economy fails to recover strongly following the massive 50 basis point rate cut, the Asian market will suffer as recessionary fears grow.

Nikkie 225

The Nikkei 225 has recovered its lost ground and has been trading with positive momentum for the last few weeks on the back of improved investors’ sentiment. 

In the last 5 days, the index has gained nearly 4%, moving closer to its all-time high level. The Jibun Bank Services PMI rose from 53.7 in August to 53.9 in September. In contrast, the Jibun Bank Manufacturing PMI dropped from 49.8 to 49.6 in September. Also, the input cost inflation eased across the private sector.

Looking at the daily chart of the Nikkei 225 index, we can see that the index is trying to move higher but is currently experiencing strong resistance at the 38,000 level. If it succeeds in breaking higher, the next major resistance is at the 39,000 level. 

The 20-day EMA slope is providing immediate support to the index. If it breaks below the slope, the 37,000 level will be its next support level. 

Contributions from all sectors, particularly Finance, Producer Manufacturing, Consumer Durables, Technology Services, Electronic Technology, and the Process Industry, are helping the market increase. 

The following are the top gainers in the last week. 

Hang Seng

The People’s Bank of China (PBoC) has reduced the Reserve Requirement Ratio by 50 basis points. In addition, it has lowered lending rates on existing mortgages to help China’s struggling real estate market.

Furthermore, the PBoC stated that it may take additional measures to support the economy. These policy measures are expected to further support and revitalize the economy, increasing demand for mainland Chinese and Hong Kong-listed stocks.

The Hang Seng index is trading with strong positive momentum because of the US Fed rate cut and the rate cut in China. In the last five trading sessions, it has moved up nearly 10%. 

The daily chart shows that the index is trading closer to its all-time high level, which is experiencing some resistance. Given the positive sentiment in the broader global market, the strong momentum in the Hong Kong market will likely persist. 

All sectors and components of the Hang Seng index, including finance, energy minerals, retail trade, transportation, and technology services, contribute to its rally.

The following are the top gainers from the last week. 

Nifty 50

The Nifty 50 index continued to trade bullishly, closing at a new all-time high of 25,940 but failing to break above the psychologically important 26,000 level. Expectations of additional rate cuts in the United States and China’s stimulus announcement drive the market higher. On the sectoral front, finance, metal, oil and gas, and power stocks are driving the index higher.

The daily chart of the Nifty 50 shows that the index is trading close to its all-time high and attempting to move higher. Overall, the 20-day EMA slope provides immediate support to the market. If the market attempts to test for support below 25,500, the index will likely find strong support at this level. 

The top contributors to the index include Finance, Consumer Non-Durables, and Utilities, which all support the index’s move higher. Meanwhile, IT stocks are pulling the market down.

The following are the top gainers in the last one week. 

The following are the top losers in the last one week across various sectors:

Conclusion

Optimism about a rate cut in the United States and China’s stimulus announcements push the market higher. However, uncertainties remain, as if economies fail to recover following central bank actions, another wave of market selloffs is expected. Investors should exercise caution and closely monitor economic indicators and central bank actions in the coming weeks.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.