Month: January 2025

Indian pharmaceutical (IT) major, Dr Reddy’s Laboratories, is scheduled to deliver its October-December quarterly earnings for the financial year 2024-25 (Q3FY25) on Thursday, January 23, 2025.  

According to analyst estimates compiled by Business Standard, Dr Reddy’s Labs may see its average revenue rise by 14.7 per cent year-on-year (Y-o-Y) to Rs 8,281 crore as against Rs 7,236 crore in the third quarter of FY24. Sequentially the topline may increase by 0.7 per cent compared to Rs 8,038 crore in Q3FY24. 

Moreover, the pharma major may register an average net profit of Rs 1,459 crore for the December quarter, against Rs 1,302crore in Q3FY24, which translates to an increase of 12 per cent Y-o-Y for Q3FY25. 

On a quarterly basis, profits could rise by 9.8 per cent. The company reported a profit after tax (PAT) of Rs 1,328 crore in the September quarter of FY25. 

Here’s what key brokerages anticipate for Dr Reddy’s Labs Q3 FY25 results:

Axis Securities: Analysts forecast $310 million in base business revenue and $140 million from gRevlimid sales in the US, with overall flat sequential growth in US sales driven by stable gRevlimid contributions. They emphasize the importance of management commentary on US base business trends and margins as key monitorables.

PL Capital: The brokerage highlights that weak US base business performance will be offset by Q-o-Q growth in Revlimid sales. The integration of Sanofi’s portfolio is expected to support domestic growth. Commentary on US base business performance and margin trends will be crucial to monitor. 

HDFC Securities: Analysts project a sequential decline in the US business due to lower Revlimid sales, with the base business expected to remain steady at $285–290 million. India’s revenue is anticipated to grow by 14 per cent Y-o-Y, driven by incremental contributions from the acquired Sanofi vaccine business. The NRT business, incorporated after its acquisition in September 2024, is also expected to support growth. Gross and Ebitda margins are predicted to remain stable. 

Nuvama Institutional Equities: The brokerage expects Dr Reddy’s revenue grew by 17 per cent Y-o-Y and Ebitda by 13 per cent Y-o-Y, with Ebitda margins at 27.5 per cent, supported by gRevlimid contributions. US revenue is projected at $427 million, driven by strong gRevlimid sales. India business growth is estimated at 19 per cent Y-o-Y, comprising 11 per cent organic growth and approximately Rs 900 crore from the vaccine business. Growth in the Rest of the World (RoW) segment is anticipated, aided by improvements in China, Brazil, and Russia.

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 Laxmi Dental shares made a decent debut on the stock exchanges on Monday, January 20, 2025. On the National Stock Exchange (NSE), Laxmi Dental IPO listing price was Rs 542 per share, reflecting a listing gain of 26.6 per cent or Rs 114, as against the issue price of Rs 428. 

Similarly, on the BSE, Laxmi Dental shares listed at Rs 528 apiece, commanding a premium of 23.3 per cent or Rs 100, as compared to its initial public offering (IPO) issue price. 

Laxmi Dental’s IPO listing performance was slightly below the grey market expectations. Ahead of the debut, Laxmi Dental IPO GMP (grey market premium) stood at Rs 145 or 33.88 per cent, as per sources tracking grey market activities.

With a price band of Rs 407 to Rs 428 per share, Laxmi Dental IPO opened on Monday, January 13, 2025, and concluded its subscription on Wednesday, January 15, 2025. The basis of allotment was finalised on Thursday, January 16, 2025. 

Laxmi Dental IPO was a book-built issue of Rs 698.06 crore, which combined fresh issue of 3.2 million shares, aggregating to Rs 138 crore, and an offer for sale (OFS) of 13.1 million shares, aggregating to Rs 560.06 crore. The lot size was 33 shares and the public issue was subscribed 60.02 times, according to NSE data.

The proceeds of the IPO are said to be utilised for the repayment of borrowings, investment in certain subsidiaries for the repayment of borrowings, funding the capital expenditure requirements for purchasing new machinery, investment in the subsidiary, Bizdent Devices for the capital expenditure requirements for the purchase of new machinery and for general corporate purposes. 

Link Intime India was the registrar for the IPO, while Nuvama Wealth Management, Motilal Oswal Investment Advisors, and SBI Capital Markets were the book-running lead managers. 

Laxmi Dental is an integrated dental products company. The company offers custom crowns and bridges, branded dental items like clear aligners and thermoforming sheets, aligner-related products as part of its aligner solutions, and pediatric dental products. Their product portfolio includes custom crowns and bridges, clear aligners, thermoforming sheets, pediatric dental products, and more. The company offers thermoforming sheets, biocompatible 3D printing resins, and machines for manufacturing clear aligners under the brand name Taglus.

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Last week, equity benchmark indices ended in the negative zone for the second straight week amid bouts of volatility, as bulls attempt to defend the 23,000-mark on the Nifty 50. The BSE benchmark – Sensex 30 hit a low of 76,250, and ended the week with a loss of 760 points at 76,619. The Nifty hit a low of 23,047, before signing off the week at 23,203. IT shares were a major drag on the benchmark indices post Q3 results. HCL Technologies tumbled over 10 per cent. Infosys plunged nearly 8 per cent, and Wipro shed 6 per cent. TCS and Tech Mahindra were down around 3 per cent each. Among others, Mahindra & Mahindra, Trent, Axis Bank, Hindustan Unilever, Dr.Reddy’s Labs and Apollo Hospitals declined 3 – 6 per cent. On the positive front, Hindalco rallied over 7 per cent. NTPC, HDFC Life, Coal India, Reliance Industries, Adani Ports, Maruti Suzuki, SBI Life Insurance and Bharat Electronics gained 4 – 6 per cent each. Outlook for the week – Jan 20 – Jan 24, 2025. 

BSE Sensex Current Level: 76,619 Support: 76,350; 76,200; 76,085 Resistance: 77,030; 77,155 Going ahead, this week, the recent low around 76,300 levels holds the key for the Sensex. As long as the BSE benchmark manages to sustain above it on a daily closing basis, market participants can hope for a relief rally to emerge. The weekly Fibonacci analysis suggests a likely trading range of 75,960 – 77,280 for the BSE Sensex. Interim support for the Sensex is placed at 76,350 – 76,200 – 76,085 levels; whereas resistance on the upside can be expected around 77,030 – 77,155. In case, the Sensex breaches the lower end of the trading range, it can extend the fall towards 75,760 – 75,200 levels. On the upside, sustained trade above 77,000-mark can see the BSE benchmark jump towards 78,150; above which the market may witness some short-covering.

 NSE Nifty Current Level: 23,203 Support: 23,000; 22,880 Resistance: 23,600 Technically, the bias for Nifty is expected to remain weak as long as the NSE index remains below the 20-DMA (Daily Moving Average), which stands at 23,600 levels. On the downside, the Nifty seems on course to test the 20-MMA (Monthly Moving Average) at 22,257; below which a test of 21,500 levels seems likely. Key momentum oscillators on the daily and weekly chart are still in favour of the bears. Interim support for the index can be expected around the 23,000-mark and 22,880 levels.

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Dividend, Bonus, stock-split: Shares of Angel One, Havells India, Waaree Renewable Technologies, Blue Cloud Softech Solutions, BN Rathi Securities, and 7 other companies are set to be in focus next week between January 20, 2025, and January 24, 2025, for corporate actions such as dividends, stock splits, and bonus issues.  

According to data from the BSE, Angel One, Bhansali Engineering Polymers, Havells India, DCM Shriram, Mastek, Vidhi Specialty Food Ingredients, and Waaree Renewable Technologies will trade ex-date for dividend distributions.  

Meanwhile, Blue Cloud Softech Solutions, Nava, and Insolation Energy will trade ex-date for stock splits. BN Rathi Securities is scheduled to trade ex-date for both a stock split and the issuance of bonus shares.

Stocks to trade ex-date next week for dividend announcements: 

Angel One

Shares of stockbroking and allied services provider Angel One will trade ex-date on Tuesday, January 21, 2025, following the announcement of a dividend of Rs 11 per share for its shareholders. The company has also fixed January 21, 2025, as the record date for determining shareholder eligibility for the said corporate action. 

Bhansali Engineering Polymers, Havells India

Bhansali Engineering Polymers, and Havells India shares will trade ex-date on Wednesday, January 22, 2025, following dividend announcements of Re 1, and Rs 4 per share, respectively. The record date for both announcements has also been fixed as January 22, 2025.

Mastek, Waaree Renewable Technologies

Mastek, and Waaree Renewable Technologies will trade ex-date on January 24, 2025, following dividend announcements of Rs 7, and Re 1 per share, respectively. Both companies have fixed January 24, 2025, as the record date for determining shareholder eligibility for the said corporate actions. 

DCM Shriram, Vidhi Specialty Food 

DCM Shriram shares will trade ex-date on January 24, 2025. In an exchange filing, the company stated that its board meeting scheduled for January 18, 2025, will “consider the payment of the second interim dividend, if any, for the financial year 2024-25, and issuance of non-convertible debentures on a private placement basis.”

Similarly, Vidhi Specialty Food Ingredients’ board will meet on Monday, January 20, 2025, to consider and declare a third interim dividend for the financial year 2024-25, if any. As per the exchange filing, Friday, January 24, 2025, has been fixed as the record date for this purpose. 

Stocks to trade ex-date next week for subdivision (stock split) announcements: 

Blue Cloud Softech Solutions

Software products company Blue Cloud Softech Solutions has announced the subdivision/split of each fully paid-up equity share having a face value of Rs 2 each into 2 equity shares having a face value of Re 1 each. The company’s shares will trade ex-date on Monday, January 20, 2025, which is also the record date for determining shareholder eligibility for the subdivision/split.

Nava

Ferro-alloy producer Nava has announced the subdivision (stock split) of 1 equity share of face value Rs 2 each fully paid-up into 2 equity shares of face value Re 1 each fully paid-up. The company’s shares will trade ex-date on Monday, January 20, 2025, which is also the record date for determining shareholder eligibility for the subdivision. 

Insolation Energy

Power generation company Insolation Energy will trade ex-date on January 24, 2025, following the announcement of a subdivision (stock split) of its equity shares from 1 equity share having a face value of Rs 10 each fully paid-up into 10 equity shares having a face value of Re 1 each fully paid-up.

BN Rathi Securities

BN Rathi Securities will remain in focus due to announcements of a stock split and the issuance of bonus equity shares. The company, in an exchange filing, has announced that its board has approved the subdivision of 1 equity share of face value Rs 10 each fully paid-up into 2 equity shares of face value Rs 5 each fully paid-up. 

Additionally, BN Rathi Securities has announced the issuance of bonus shares in the ratio of 1:1, i.e., 1 new fully paid-up equity share of Rs 5 each for every 1 existing fully paid-up equity share of Rs 5 each held by shareholders. The company has fixed January 24, 2025, as the record date for determining shareholder eligibility for both corporate actions, which also marks the ex-date.

The ex-date is when a stock begins trading without the entitlement to dividends, subdivision (stock-split), or bonus shares. This means that on or after this date, the dividends, subdivision (stock-split), or bonus shares are not available to a new buyer of the stock. To qualify for these corporate actions, investors must own the stock before the ex-date. The beneficiaries of dividends, subdivision (stock-split), or bonus shares are determined based on the list of investors recorded by the end of the record date.

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Axis Bank Q3 results: A near wash-out quarter, with more misses than beats, has forced analysts to cut Axis Bank share price target for the next one year. They, however, see limited downside in the stock, falling back on valuation comfort. 

Nuvama Institutional Equities, for instance, has cut its one-year share target price on Axis Bank to Rs 1,220 from Rs 1,335 as the brokerage gave a thumbs down to Axis Bank’s muted deposit growth, net interest margin (NIM) contraction, lower fees, and a sharp rise in slippage and credit costs. 

“Gross slippages shot up 22 per cent quarter-on-quarter (Q-o-Q) in the December quarter (Q3FY25), higher than consensus estimate, to 2.2 per cent; and more than 1.8 per cent in Q2FY25 and 2 per cent in Q1FY25. Net slippages also surged 48 per cent Q-o-Q, with net retail slippages as a percentage of loans at 2.1 per cent versus 1.7 per cent Q-o-Q. Specific credit cost went up sharply from 58bp Q-o-Q to 86bp Q-o-Q, highest among large banks and highest since Covid,” the brokerage pointed out. On the bourses, Axis Bank share price tumbled 6.3 per cent intraday to hit a fresh 52-week low of Rs 974.45 per share. The stock ended 4.6 per cent weak in the BSE at Rs 992.45 per share as against a 0.55 per cent fall in the benchmark BSE Sensex index.

On Thursday, Axis Bank reported fresh slippages of Rs 5,432 crore for Q3FY25, up 46 per cent year-on-year (Y-o-Y) and 22.25 per cent Q-o-Q. This included Rs 4,923 crore from the retail portfolio; Rs 215 crore from SME (small and medium enterprise) business; and Rs 294 crore from wholesale business.

The bank’s loan-loss provisions shot up to Rs 2,185 crore in Q3 as against Rs 1,441 crore in Q2FY25 and Rs 691 crore in Q3FY24. 

It also saw worsening of asset quality during the recently concluded quarter with gross non-performing asset (GNPA) ratio at 1.46 per cent as against 1.44 per cent at the end of the September quarter. Net NPA ratio, too, rose to 0.35 per cent from 0.34 per cent in Q2FY25.

On the business front, Axis’ loan book grew 9 per cent Y-o-Y and 1.5 per cent sequentially to Rs 10.14 trillion, driven by 11 per cent Y-o-Y growth in retail loans. Deposits, too, increased 9 per cent Y-o-Y and 0.8 per cent Q-o-Q. The growth is below peers and industry average. 

Moreover, the bank’s loan-to-deposit ratio (LDR) rose from 92 per cent in Q2FY25 to 92.6 per cent this quarter. 

The management believes FY25 credit growth will be anchored by deposit growth/LDR, which, analysts think, is still a challenge.

NIM, too, contracted by 6bps Q-o-Q to 3.93 per cent, including 3bps Q-o-Q contribution from interest reversal on NPAs and 3bps due to higher liquidity coverage ratio (LCR; up by 400bps Q-o-Q to 119 per cent). 

“Credit growth moderation was mainly driven by slowdown in the bank’s retail book (including unsecured loans and corporate book), which is likely to stay soft amid liquidity and asset quality challenges. The management believes unsecured loan stress will remain elevated near-term, but seasonal stress in the agri portfolio should ease Q-o-Q. Building in the slower credit growth and higher loan provisions, partly offset by moderating opex, we cut earnings by 3-9 per cent over FY25-27E,” noted those at Emkay Global Financial Services.

The brokerage, too, has cut its share price target to Rs 1,300 from Rs 1,400, but retained its ‘Buy’ rating as it believes the stock has seen sharp correction recently (down 10 per cent in 3 months) and trades at relatively lower valuations of 1.3-times December, 2026, adjusted book value (ABV) for a bank still delivering healthy 1.7-per cent return on asset (RoA) and 14-16 per cent return on equity (RoE). 

Given the strong growth in Q4FY24 and slower accretion in 9MFY25, the base effect gets adverse in Q4FY25 on deposits and loan growth. So, even with higher Q-o-Q deposit growth, the YoY growth in deposits could fall further to 6 per cent Y-o-Y, cautioned analysts at Nuvama with a ‘Buy’ rating. 

“We keenly monitor near-term growth as the LDR is still high, which will constrain credit growth, while continued re-pricing of deposits may keep margins in check. We cut our FY26E/FY27E earnings by 4-5 per cent and estimate FY26E RoA/RoE of 1.6 per cent/14.6 per cent. While the near-term growth and asset quality performance will likely remain suppressed, reflecting the stress in the macro environment, we see limited downside risk from the current levels,” said analysts at Motilal Oswal Financial Services as it retained a ‘Neutral’ rating with a lower share price target of Rs 1,175. 

Axis Bank’s Q3FY25 net profit stood at Rs 6,034 crore, rising a meagre 4 per cent Y-o-Y. Its net interest income (NII) grew 9 per cent Y-o-Y/0.9 per cent Q-o-Q to Rs 13,606 crore.

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