Stock Market Highlight: Markets close higher! Nifty above 22,550, Sensex gains over 480

Courtesy: BSE

Axis Bank, State Bank of India, Dr Reddy’s Lab, Nestle India, and Hero MotoCorp are the top gainers on NSE Nifty 50 index whereas the top laggards include Kotak Mahindra Bank, LTIMindtree, Titan Company, Hindustan Unilever, and Bajaj Finance.

Courtesy: NSE

JM Financial suggests that margin expansion for Hindustan Unilever (HUL) is unlikely due to the absence of pricing leverage and the continuation of competitive intensity. The brokerage firm notes that HUL’s share price has experienced a significant correction, reflecting muted earnings growth in FY24E.

Despite this, JM Financial highlights that the stock’s very low return over the last three years and valuation below historical averages could potentially offer support on the downside, considering that most negatives are already factored in.

Given the challenging operating environment, JM Financial indicates that any rerating of the stock will depend on improved visibility regarding volume acceleration and achieving double-digit earnings growth.

JM Financial retained its ‘Buy’ recommendation on HUL shares while revising down the target price to Rs 2,640 per share from Rs 2,970 previously.

Read More: HUL shares slip on lower than expected Q4 revenue and margin growth: Here are some brokerage views

GPT Healthcare saw a 3.94% increase in its stock price to Rs 180.50 following the announcement that the company has signed a Lease Agreement with Sun and Sun Inframetric Private Limited and Mosaic Infraventure Private Limited on April 24, 2024. The agreement entails the construction and completion of a hospital building in Raipur, equipped with all necessary amenities and services.

Nestle India‘s stock surged by 1.78% to reach Rs 2,544.65 following the announcement that the company’s board has given the green light to a definitive agreement for establishing a joint venture with Dr. Reddy’s Laboratories. Additionally, the board has approved the introduction of Nespresso in India, with the company set to handle the sale and distribution of Nespresso products, including machines and capsules. Nestle anticipates the launch of Nespresso in India by the conclusion of 2024.

Brokerage firm Prabhudas Lilladher reaffirmed its buy recommendation on Axis Bank’s stock and revised the target price upwards to Rs 1,400 from Rs 1,250 previously.

According to Prabhudas Lilladher, Axis Bank remains their top pick due to expectations of a superior Net Interest Margin (NIM) trajectory over FY24-26E. They anticipate that by FY26E, the core Return on Assets (RoA) and Return on Equity (RoE) will reach 1.7% and 16%, respectively. The firm notes that despite this positive outlook, the stock is currently trading at a 29% discount to ICICI Bank, a gap they expect to narrow.

Prabhudas Lilladher maintains a valuation multiple of 2.2 times and adjusts their target price to Rs 1,400, up from Rs 1,250, as they roll forward to Mar’26 Adjusted Book Value (ABV).

The NSE Nifty 50 was down 4.45 points or 0.02% at 22,398, while the BSE Sensex was up 7 points or 0.01% at 73,859.87.

The NSE Nifty 50 traded flat marginally higher by just 1.45 points or 0.01% at 22,403.85, while the BSE Sensex gains just 31.43 points or 0.04% to 73,884.37.

Motilal Oswal anticipates a turnaround in Hindustan Unilever’s volume growth, projecting a gradual recovery in FY25. They highlight the company’s expansive product portfolio and market presence across various price segments as factors that could facilitate a steady growth rebound.

The brokerage firm suggests potential for improvement in certain segments such as Beauty & Personal Care (BPC) and Foods & Refreshment (F&R), with close monitoring of execution under the new CEO.

Motilal Oswal considers the valuation at less than 45 times the FY26E EPS as reasonable, citing the company’s historical average Price-to-Earnings (P/E) ratio of 60x on one-year forward earnings over the last five years.

Given the perceived favorable risk-reward ratio, Motilal Oswal reaffirms its ‘Buy’ rating on HUL and sets a target price of Rs 2,900 per share, based on 55 times the FY26E EPS.

Courtesy: NSE

In early trading on Thursday, April 25, Axis Bank‘s share price surged over 5%, following the private lender’s announcement of a profit of Rs 7,130 crore for Q4FY24, a stark contrast to the loss of Rs 5,728.4 crore reported in the corresponding quarter of the previous financial year.

Commenting on the Technical outlook of Nifty Rupak De, Senior Technical Analyst, LKP Securities, said The Nifty remained sideways throughout the session before closing with a slight gain. Sentiment for the short term continues to remain positive as the index closed above the critical moving average. The positive crossover in the RSI also supports the positive momentum. On the higher end, immediate resistance is placed at 22,500. A decisive move above 22,500 might take the index towards 22,750-22,800 over the short term. Support is placed at 22,350-22,400.

Read More: Vodafone Idea FPO shares list at a 7.78% premium, at Rs 11.80

Axis Bank, HCL Tech, Sun Pharma, State Bank Of India, and ICICI Bank are the top gainers on NSE Nifty 5o index whereas the top laggards include Kotak Mahindra Bank, Tata Consumers, Hindustan Unilever, LTIMindtree, and Apollo Hospitals.

“Vodafone Idea is consolidating near the crucial zone of 200 SMA, suggesting a make-or-break for the counter. The recent traction based on the FPO is likely to showcase some volatility in the counter but on the front of the level, a sustainable breakthrough above 14.50 would only trigger momentum on the higher end for the 16.60 zone,” said Osho Krishan, Senior Analyst of Technical & Derivatives at Angel One.

Krishan also added that while on the lower end, a breakdown below 12.30 (200 SMA) is likely to disrupt the technical setup, and stock might slip towards the 11-10 odd zone on an immediate basis. “Hence, it is advisable to maintain caution and have a pragmatic approach to the counter.”

The share price of Vodafone Idea FPO opened at Rs 11.80 per share on the NSE, marking a 7.27% increase compared to the issue price of Rs 11. On the BSE, the share price of Vodafone Idea FPO opened at Rs 12 apiece today, reflecting a 9% increase from the issue price.

The shares of Kotak Mahindra Bank plunges 10% to day lows of Rs 1658.55 on the following news that the Reserve Bank of India (RBI) has imposed restrictions on Kotak Mahindra Bank, prohibiting the private lender from onboarding new customers via its online and mobile banking channels. Additionally, the bank is barred from issuing fresh credit cards with immediate effect. These actions come after the regulator identified “serious deficiencies” in the bank’s IT risk management.

The NSE Nifty 50 opens down by 0.38% at 22,316.90, while the BSE Sensex drops 0.38% to 73,572.35 in the opening trade.

Shares in the Asia-Pacific region are trading in mixed territory on Thursday morning. The Asia Dow is trading up by 1.63%, where as the Japan’s Nikkei 225 is trading in red, down by 1.67%, Hong Kong’s Hang Seng index up by 1.15% and the benchmark Chinese index Shanghai Composite is trading up by 0.41%.

The NSE has added Aditya Birla Fashion, Hindustan Copper, and SAIL in F&O on April 23, 2024.

Foreign institutional investors (FII) offloaded shares worth net Rs 2,511.7 crore, while domestic institutional investors (DII) bought shares worth net Rs 3809.9 crore on April 24, 2024, according to the provisional data available on the NSE.

WTI crude prices are currently trading at $82.75, reflecting a 0.06% increase, whereas Brent crude prices stand at $87.97, up by 0.08%, as of Wednesday morning.

The US Dollar Index (DXY), gauging the dollar’s value against a basket of six foreign currencies, saw a 0.10% increase, trading at 105.78.

According to Bloomberg, the world’s largest bond market faced pressure as Wall Street prepared for another substantial sale of Treasuries, a development that could signal whether a turning point is imminent following this year’s selloff. The tech-heavy Nasdaq Composite closed marginally higher, up by only 16.11 points or 0.10% at 15,712.75. Meanwhile, the S&P 500 recorded a modest gain of just 1.08 points or 0.02% at 5,071.63, and the Dow Jones Industrial Average closed lower by 42.77 points or 0.11% at 38,460.92.