Month: May 2025

The Indian equity market seems to be holding its ground fairly well amid the rising India-Pakistan border tensions. The NSE Nifty 50 index has gained 1 per cent since the terror strike in Kashmir’s Pahalgam on April 22, which left 26 civilians dead. Even on Wednesday May 7, post India’s ‘Operation Sindoor’ on Pakistan, and Pakistan-occupied-Kashmir (PoK) terror sites, the Nifty ended the day on a positive note, with mild gains. Historical data shows that the market has delivered steady gains in the one-month period post past similar India-Pakistan conflicts. The NSE Nifty for instance has delivered an average gain of 4.7 per cent in the one-month period after past five such India-Pakistan clashes namely – the 1999 Kargil war, 2001 Parliament attack, 2008 Mumbai 26/11 terror strike, Uri Attack in 2016 and Pulwama & Balakot strikes in 2019.

According to ACE Equity data, there are a total 262 common stocks that were traded on the NSE during all 5 India-Pakistan conflicts. Here’s an analysis on these 262 commonly traded stocks on the NSE during the last 5 India-Pakistan conflicts: Data shows that 26.3 per cent of the commonly traded stocks in these periods, i.e. 69 out of the 262 stocks logged an average gain of over 10 per cent in the one month period post start of India-Pakistan conflicts. Out of which, 14 stocks had registered an average gain in excess of 20 per cent.

Here’s a list of top gainers & losers during the past India-Pakistan conflicts – 

Kesoram Industries logged an average gain of 33.5 per cent, and was the standout performer among the 262 stocks. The stock was closely followed by Hindustan Motors, which delivered an average gain of 31 per cent in the one-month period post the last 5 India-Pakistan clashes. That apart, a total of 12 stocks investments made investors’ richer by 20 – 25 per cent. Prominent names among these were – Trent, Raymond, BPCL, Ashok Leyland, Gujarat Mineral Development (GMDC) and Century Enka.

Among the balance stocks that rose more than 10 per cent in similar one-month periods – well-known stocks were – Rolta India, ACC, Bombay Dyeing, SBI, Tata Steel, Bharat Electronics, Kotak Mahindra Bank, Grasim Industries, CG Power and Industries, Balrampur Chini, India Cements, ICICI Bank, Tata Motors, HPCL, Container Corporation, Shree Cement, Vedanta, Aurobindo Pharma, Indian Oil and Reliance Industries.

On the flip side, mere 8 out of the 262 commonly traded stocks delivered an average negative return in excess of 5 per cent. Ashima down 8.5 per cent was the consistent loser. Tamilnadu Telecommunications, Natco Pharma, ITI, Kothari Products, Onward Technologies, Tata Elxsi and Hexaware Technologies were the other key laggards.

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Dr Reddy’s Q4 results preview: Pharmaceutical major Dr Reddy’s Laboratories is expected to report a solid year-on-year (Y-o-Y) growth in both revenue and profit for March 2025 quarter (Q4FY25) on the back of Nicotinell acquisition, persistent US business growth, and expectations of a favourable business back home. 

Dr Reddy’s Labs Q4 results date:

The company is scheduled to announce its fourth quarter results on Friday, May 9. 2025.

Dr Reddy’s Labs Q4 results: Profit expectations

According to brokerages tracked by Business Standard, Dr Reddy’s net profit is expected to come at ₹1,456.5 crore, marking around 18.6 per cent Y-o-Y increase, on average, as against ₹1,227.8 crore in the year-ago period (Q4 FY24). On a quarterly (Q-o-Q) basis, the company’s bottomline is projected to grow by an average of nearly 3 per cent.

Dr Reddy’s Labs Q4 results: Revenue expectations 

The pharma major’s revenue for the quarter under review is expected to increase 17.07 per cent to ₹8,328.26 crore, on average, as compared to ₹7,113.8 crore in the corresponding quarter of the previous fiscal. On a sequential basis, revenue is expected to remain flattish compared to ₹8,358.6 crore in the December 2024 quarter. 

Brokerages expected the company’s earnings before interest, tax, depreciation and amortisation (Ebitda) to increase nearly 25 per cent to ₹2,311.5 crore in Q4FY25 compared to ₹1,849.8 crore in the year-ago period. 

Here’s how analysts expect Dr Reddy to perform in Q4 FY25:

Phillip Capital: Analysts at Phillip Capital expect Dr Reddy’s Labs to post a robust topline growth led by integration of Haleon OTC business acquisition along with benefits of gRevlimid. The company is a proven lead beneficiary of gRevlimid amongst its competitors and continues to lead the sales with $160 million from gRevlimid. Domestic business is expected to benefit from the Sanofi vaccine licensing deal, and joint venture (JV) with Nestle. In addition, steady growth in US base business sales, integration of Nicotinell and 13 per cent growth in India will also boost topline growth.

The brokerage expects Ebitda margins to improve 210 basis points Y-o-Y to 28.2 per cent mainly driven by higher gRevlimid sales and strong growth in domestic formulation business, leading to a 33 per cent Y-o-Y growth in Ebitda. 

Nirmal Bang Institutional Equities: The domestic brokerage firm expects Dr Reddy’s revenue to increase 17.5 per cent Y-o-Y, mainly on account of NRT brand Nicotinell acquisition. US revenue is expected to grow 7 per cent Y-o-Y to $410 million. India business should increase by 24 per cent Y-o-Y on account of expectations of a favorable season and a marginal uptick in the cardiology and GI segment. 

HDFC Securities: Analysts at HDFC Securities expect the pharma major’s US business to grow by 4 per cent Q-o-Q due to gRevlimid sales, which will be partly offset by price and market share erosion in the base business price due to incremental competition in key products. India business is likely to increase by 15 per cent Y-o-Y on account of incremental sales from acquired vaccine business from Sanofi. 

 “We have factored NRT business. We expect gross margin and Ebitda margin to remain steady,” the brokerage said.

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Stock Market Outlook post Operation Sindoor: Indian stock markets are likely to exhibit high volatility in the near-term as rising tensions between India-Pakistan, following India’s retaliatory action to avenge the Pahalgam terror strike in Kashmir. In the wee hours of Wednesday, the Indian armed forces launched a series of strikes under ‘Operation Sindoor’ on terror infrastructure in Pakistan and Pakistan-occupied Kashmir (PoK). A total of nine sites were targeted by the Indian armed forces, with the Indian Army shortly announcing, “Justice is served.” Following which, GIFT Nifty May futures tumbled to a low of 24,227; but since then have recovered and quoted around 24,350 levels in morning deals. Here are the key levels to watch out for on the NSE Nifty 50 index and the BSE Sensex as market brace for likely impact of rising India-Pakistan tensions. 

NSE Nifty Current Level: 24,380 Downside Risk: 6.4% Support: 24,200; 24,000; 23,700 Resistance: 24,350; 24,460; 24,589 Technical chart shows presence of near support for the Nifty at 24,200 levels; below which the index may seek support around its 200-day Simple Moving Average (200-DSMA), which stands at 24,050 levels. The overall bias for the Nifty is expected to remain favourable as long as the index holds above 23,700 levels, on a daily closing basis. Key momentum oscillators like the 14-day Relative Strength Index (RSI), the Moving Average Convergence-Divergence (MACD) and the Stochastic Slow were showing signs of tiring out, post the recent 13 per cent rally in the Nifty from a low of 21,744 on April 7. The recent rally saw the Nifty gain 2,845 points in absolute terms. As per the retracement theory, a 38.2 per cent retracement of the recent rally indicates that the Nifty can potentially fall to 23,500 levels. Similarly, 50 per cent and 61.8 per cent retracement of the rally suggests a likely downside target of 23,165 and 22,830 levels, respectively. For now, upside on the Nifty may be capped around its recent high at 24,589-odd levels, with near resistance likely around 24,350 and 24,460 levels.

BSE Sensex Current Level: 80,641 Downside Risk: 4.3% Support: 79,365; 78,070 Resistance: 80,900; 81,100; 82,000 The weekly Fibonacci chart suggests key support for the BSE Sensex at 79,365 levels. Break and sustained trade below the same can potentially accentuate the fall, and the Sensex could then slide to 78,070 and 77,150 levels in the short-term. On the upside, the 80,900 – 81,100 zone shall act as the near-term resistance zone; above which the major hurdle for the BSE Sensex stands around the 82,000-mark.

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A prolonged war / tension with Pakistan post Operation Sindoor – the retaliatory attack by Indian armed forces on Pakistan and Pakistan Occupied Kashmir (PoK) – could ‘sink’ markets, suggest analysts. However, they could see a recovery in due course if the measures are limited only to select targets and the tensions de-escalate, they said. 

History, Aniruddha Sarkar, chief investment officer at Quest Investment Advisors said, suggests that Indian markets have most of the times done well during and even after any conflict with Pakistan on the borders. This time is no different.

“Though the geopolitical concerns have been there for the last two weeks, yet foreign institutional investor (FII) inflows continued into our markets, which is a stamp of our economic resilience to these short-term border conflicts. Any military campaign which would be limited to selected targets and be over within a few days or weeks, would not have any negative impact on our economy or markets. Prolonged conflict, which seems unlikely at this moment, could impact investor sentiment negatively as they would prefer a risk off mode,” Sarkar said. 

In the intervening night of May 6 and May 7, Indian armed forces carried out strikes on terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir (PoJK) in response to the terrorist attack in Pahalgam on April 22 that left 26 civilians dead.

Historically, Indian equity markets have typically reacted sharply to geopolitical tensions in the short-term as a knee-jerk, but recovered quickly once uncertainties subsided. 

For example, during the Kargil conflict between India and Pakistan in mid-1999, markets experienced a significant correction. However, they rebounded strongly as it became evident that the conflict would be short-lived.

Ambareesh Baliga, an independent market analyst, too, feels that if Operation Sindoor remains localised within a band / territory with targeted strikes and ends soon, the markets could witness a smart recovery. 

“In case the current conflict widens, the uncertainty will sink the market. As of now it would be a wait-and-watch strategy. Post Balakot also, we witnessed a smart move up in the markets,” he said.

The information available till now on Operation Sindoor has been digested by the markets, feels U R Bhat, co-founder & director, Alphaniti Fintech. For the markets to stabilize, he feels, more information is needed on how Pakistan is likely to react to the developments.

“The markets are waiting with bated breath and are likely to remain volatile. While the available information has been digested by the markets, any escalation in the tensions will see them spiral down. As a strategy, investors should sell the rallies till there is truce and more clarity on the developments,” he said.

Within the market segments, G Chokkalingam, founder and head of research at Equinomics Research, said small-and mid-cap segments may underperform the large-caps as retail investors’ participation seems to be weak due to geopolitical developments. 

“Till intense tensions on border moderates, we suggest some tilt towards large-caps, especially the Sensex and Nifty stocks.  Of course, if there is any escalation or war with Pakistan, then the whole market, including large-caps may see a substantial fall,” he warns.

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Shares of the Mid and Smallcap companies were outperforming in an otherwise flat market on Wednesday, May 7.   The Smallcap and Midcap indices, which initially dropped nearly 1.5 per cent, reversed their losses and were now trading with gains of over 1 per cent each.  

The Nifty MidCap100 index rallied 2.87 per cent from the intra-day low to 54,242.4, while the Nifty SmallCap250 index climbed 2.71 per cent from the day’s low to an intra-day high of 16,373.6 levels on Wednesday.

BSE leads the rally

From the Midcap basket, BSE led the gains among the Nifty Midcap100 constituent stocks, trading higher by 8.64 per cent, followed by One 97 Communications, the parent company of Paytm, with a 7 per cent rise, at around 12 PM on Wednesday. Muthoot Finance, SRF, and Aditya Birla Fashion were among the other gainers that traded higher by over 3 per cent each.

Meanwhile, from the Smallcaps space, Welspun Living logged the highest demand, trading higher by 13 per cent. This was followed by Piramal Enterprises (8 per cent), IIFL Finance (5.82 per cent), Kfin Technologies (5 per cent), Poonawalla Fincorp (4.8 per cent), and PG Electroplast (4.75 per cent). 

Analyst advises caution

The outperformance in mid- and small-cap stocks, Prashanth Tapse, Sr VP research analyst at Mehta Equities, said, is being driven by better-than-expected Q4 earnings, renewed optimism from easing global trade tensions (notably the India-UK FTA), and steady foreign investments, all of which have boosted investor confidence.

“Further supporting the rally are declining crude oil prices and expectations of lower interest rates, which are poised to benefit the Indian economy by easing inflationary pressures and improving corporate earnings in upcoming quarters,” said Tapse.

Ravi Singh, SVP of retail research at Religare Broking, sees this as a pullback rally after the recent correction in the mid- and small-cap stocks. Notably, the Nifty Midcap100 and Smallcap100 indices had settled lower by over 2 per cent each on Tuesday, May 6. 

“In this volatile environment, investors can use derivatives to hedge against downside risk or capitalize on increased market volatility. Amid escalating geopolitical tensions, nations are increasingly prioritizing defense preparedness, resulting in a significant global surge in military spending. This trend, especially in the context of ongoing tensions with Pakistan, is expected to have long-term momentum,” said Singh.

Given the current global uncertainties, Singh advises maintaining higher levels of cash or liquid assets, as it enables swift responses to rapidly evolving conditions. A cautious approach—both in terms of current holdings and new investments—is recommended. 

Going forward, Tapse recommends adopting a sell-on-rise strategy amid continued market volatility and headline risk, while he urges long-term investors to view market dips as opportunities to accumulate high-quality, fundamentally strong businesses for medium to long-term wealth creation. 

That said, despite today’s gains, the Nifty Midcap100 and Nifty Smallcap100 indices, for the year-to-date, have logged losses of 5.25 per cent and 12.8 per cent respectively. In contrast, the benchmark Nifty50 has advanced 2.5 per cent this year.

Sensex, Nifty today

The benchmark Indian equity indices were trading on a flat note. The BSE Sensex was quoted trading at around 80,559.70 levels, down by 84 points or 0.10 per cent. The index has traded in the range of 80,844.63 – 79,937.48 today. 

Tata Motors (3.88 per cent), Titan (1.56 per cent), and Power Grid Corporation (1.40 per cent) were among the top gainers of Sensex constituent stocks, while Sun Pharma (down 1.20 per cent), Asian Paints (1.27 per cent), and ITC (1 per cent) were among the top laggards of Sensex constituent stocks. 

Meanwhile, NSE Nifty50 traded lower by merely 15 points or 0.06 per cent at 24,363 levels.

Sectoral markets update

The sectoral indices too were buzzing in trade with gains led by Auto, Metal, and Consumer Durables stocks. Barring Nifty FMCG (down 0.56 per cent), Pharma (down 0.35 per cent), and Healthcare index (0.26 per cent), all the other sectoral indices were trading higher. 

Among them, Nifty Auto, Metal, and Consumer Durables were trading higher by over 1 per cent each. Meanwhile, Banking, Oil & Gas, Financial Services, and Realty indices were trading in the range of 0.13–0.60 per cent.

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