Month: August 2024

Stocks to buy: Reliance Power shares have been on an uptrend after the presentation of Budget 2024. On 23rd July 2024, Reliance Power’s share price finished at ₹26.94 per share on the NSE, and since then, it has been hitting a 52-week high regularly. In post-Budget 2024, this Reliance Anil Dhirubhai Ambani Group or Reliance ADAG stock has risen from ₹26.94 to ₹34.54 apiece, logging around 30 percent appreciation in five straight sessions.

According to stock market experts, Reliance Power is now a debt-free company on a standalone basis. The company has repaid its ₹800 crore dues, and the Reliance ADAG company is expected to compete with other private power sector companies in FY25. The Budget 2024 is a growth-oriented budget focusing on power and infrastructure. They said the market expected the budget benefit to trickle down into the company’s balance sheet in FY25, which has fueled buying interest in Reliance Power shares. However, they maintained that after becoming a debt-free company, the company is facing an acute challenge on the order book front, which is expected to become clear in the upcoming quarters of the current fiscal.

Triggers for Reliance Power shares?

Highlighting the factors instrumental in Reliance Power’s share price rally, Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “Reliance Power is no longer a debt-hit company. The company has repaid its ₹800 crore debt and is now a debt-free company on a standalone basis. So, the company can now work on its order book, especially after the Budget 2024, which is a growth-oriented budget. So, the market expects the benefit to be reflected in the company’s order book in FY25. However, it would be interesting to see how much benefit trickles down into the financials and order book of Reliance Power.”

Reliance Power share price target

Speaking on Reliance Power shares, Sumeet Bagadia, Executive Director at Choice Broking, said, “Reliance Power share price is on an uptrend. The stock has made a strong base at ₹32. Reliance Power shareholders are advised to hold the scrip with trailing stop loss at ₹32 for the short-term targets of ₹38 and ₹40 apiece. Fresh investors can also buy Reliance Power shares for the above-mentioned targets, maintaining a strict stop loss at ₹32. One can maintain a buy-on-dips strategy in this Anil Ambani-owned company until the stock price exceeds ₹32.”

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Eicher Motors’ share price declined more than 5% on Friday after the Royal Enfield motorcycle manufacturer reported weak sales for July. Eicher Motors shares fell as much as 5.55% to ₹4,692.00 apiece on the BSE.

Royal Enfield motorcycles sales in July 2024 dropped 8% to 67,265 units from 73,117 units sold in the same month last year. This included exports of 6,057 units for the month which fell 14% from 7,055 units, year-on-year (YoY).

Sales of Royal Enfield models with engine capacity up to 350 cc declined 12% to 56,590 units in July 2024 as compared with 64,398 units in July 2023.

However, models with engine capacity exceeding 350 cc witnessed sales growth of 22% to 10,675 units from 8,719 units, YoY.

In its commercial vehicle segment, VE Commercial Vehicles Ltd (VECV), an unlisted subsidiary of Eicher Motors saw an increase in wholesales during July 2024.

Total sales of VECV in July rose 12.7% to 6,622 units from 5,877 units. Total Eicher Trucks and Buses sold during the month increased 12.3% to 6,444 vehicles from 5,736 vehicles, YoY, while the total sales of Volvo Trucks and Buses jumped 26.2% to 178 vehicles from 141 vehicles, YoY.

The Board of Directors of Eicher Motors will meet on August 8 to consider and approve unaudited standalone and consolidated financial results of the company for the first quarter ended June 30, 2024.

In a separate stock exchange filing on Friday, Eicher Motors said that the GST demand it had received earlier has now been revised to 26.97 crore from ₹129.79 crore.

The original GST demand order was received by the company on December 30, 2023, for an aggregate amount of ₹129.79 crore, which includes a tax demand of ₹117.99 crore and a penalty of ₹11.79 crore.

“As a result of the appeal filed by the Company against the above GST demand order, the demand order is now revised from ₹129.79 crores to an aggregate amount of ₹26.97 crores (which includes tax demand of ₹24.52 crores & penalty of ₹2.45 crores),” Eicher Motors said in a regulatory filing.

Based on the company’s assessment, the aforesaid revised demand is not maintainable and the company is evaluating all options including filing an appeal against the order. The company did not envisage any relevant impact on financials, operations, or other activities of the company, it added.

Eicher Motors share price has gained over 14% year-to-date (YTD), while the stock is up more than 41% in the past one year. 

At 2:15 pm, Eicher Motors shares were trading 5.04% lower at ₹4,717.80 apiece on the BSE.

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Stock market today: On Thursday, August 1, the Indian stock market benchmarks, the Sensex and the Nifty 50, achieved fresh closing highs, marking their fifth consecutive session of gains. This upward momentum was primarily driven by strong performances from index heavyweights HDFC Bank and Reliance Industries.

Sensex hit its fresh all-time high of 82,129.49, and the Nifty 50 made a fresh peak of 25,078.30 during the session.

Eventually, Sensex closed at 81,867.55, up 126 points, or 0.15 percent, while the Nifty 50 ended 60 points, or 0.24 percent, higher at 25,010.90, thus ending at their fresh closing highs.

However, mid and small-cap indices ended with losses due to profit booking amid rising concerns over rich valuations. The BSE Midcap index fell 0.80 percent, while the Smallcap index lost 0.70 percent.

Global cues were mixed. Major European markets fell, reacting to corporate earnings. However, US stock futures were in the green as the US Fed signaled rate cuts could start in September.

Speaking to reporters after the policy decision on July 31, Federal Reserve Chair Jerome Powell said, “The first interest rate cut could come as soon as the Fed’s next rate meeting in September if the data continue to suggest it is on track to meet its twin objectives of tackling inflation and employment.”

“Overnight gains in the US markets and ongoing optimism over the strong corporate earnings aided benchmark indices to scale fresh all-time highs with Nifty clocking the milestone of 25k mark and Sensex entering the 82k zone. However, weak European market cues and mixed Asian indices tempered the domestic market gains at the close,” Prashanth Tapse, Senior VP (Research), Mehta Equities, observed.

“Overall, the trading session was skewed with most of the broader and sectoral indices faltering amid profit-taking whereas metals, oil and gas, and power stocks notched up gains, indicating that investors are now getting into cherry-picking of stocks instead of mounting full-fledged bullish bets,” Tapse said.

Among the 28 stocks that ended in the green in the Nifty 50 index, Power Grid (up 3.82 percent), Coal India (up 3.47 percent), and ONGC (up 2.03 percent) stood at the top.

On the flip side, shares of Mahindra and Mahindra (down 2.78 percent), Tata Steel (down 1.37 percent), and Hero MotoCorp (down 1.35 percent) closed as the top losers in the index.

Among the sectoral indices, Nifty Media (down 1.89 percent), Realty (down 1.70 percent), PSU Bank (down 0.99 percent), and Auto (down 0.74 percent) lost significantly.

Nifty Bank and the Private Bank indices ended flat.

“The broader market closed on a negative bias due to escalating geopolitical tensions in the Middle East leading to rising crude oil prices. Sector-wise, capital goods and realty were impacted by profit-booking coupled with auto sectors owing to below-expected monthly auto sales figures,” said Vinod Nair, Head of Research, Geojit Financial Services.

“From a short-term perspective, we expect the rally to continue towards 25,330 – 25,530. Crucial support now stands at 24,850 – 24,800. The divergence between the daily and hourly momentum indicators can lead to a consolidation; however, price action is suggesting a breakout. We assign more weightage to the price action and continue to maintain our positive outlook on the Nifty,” said Jatin Gedia, a technical research analyst at Sharekhan by BNP Paribas.

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