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Nifty 50: 25,012

Bank Nifty: 55,860

Sensex: 81,741 Record Highs:

Nifty 50: 26,277

Bank Nifty: 57,842

With Diwali 2025 approaching, investors are asking: can India’s benchmark indices reclaim or surpass their record highs? After a six-week correction, the market staged a strong rebound on August 18, driven by a confluence of domestic reforms and global optimism. Experts believe five key factors will determine whether this rally sustains and accelerates.

1. Withdrawal of US Tariffs

The biggest external overhang has been the secondary tariffs imposed by the US on countries importing Russian oil, including India. President Trump has hinted at a rollback, contingent on progress in the Russia-Ukraine peace talks.

• A rollback to the 19–20% range could trigger strong foreign portfolio inflows.
• India’s fundamentals remain intact, and S&P’s recent upgrade to BBB reflects resilience despite tariff risks.
• Easing trade tensions would boost sentiment across emerging markets.

2. GST Reforms

Prime Minister Modi’s Independence Day speech unveiled next-generation GST reforms, expected to be implemented before Diwali.

• Products currently taxed at 12% and 28% may shift to 5% and 18% slabs.
• This could boost consumption, especially in auto, FMCG, and consumer durables.
• Analysts expect a rerating of the market, with Emkay Global revising its Nifty target to 28,000 for September 2026.

3. Corporate Earnings Revival

India’s macro backdrop is favorable: GDP growth remains strong, inflation is easing, and rural demand is recovering.

• Q2 and Q3 FY26 earnings will be critical. Broad-based growth across sectors could act as a trigger.
• Sectors like banking, capital goods, and autos are expected to lead the earnings rebound.

4. RBI Rate Cuts

With inflation under control, the Reserve Bank of India is expected to cut rates in its October policy review.

• Lower borrowing costs would stimulate investment and consumption.
• Rate-sensitive sectors like banking, real estate, and autos could benefit significantly.

5. Global Liquidity and Sentiment

Global cues remain supportive:

• The Trump-Putin summit in Alaska, though inconclusive, signaled easing geopolitical tensions.
• US Fed is expected to maintain a dovish stance, supporting global liquidity.
• India VIX remains low, indicating stability and reduced volatility.

Sectoral Momentum

• Nifty Auto surged 4.5% on GST cut expectations.
• Nifty Consumption rose 2.4%, led by packaged foods and beverages.
• Bank Nifty gained 1.3%, with HDFC Bank, ICICI Bank, and Axis Bank showing strength.

Technical Outlook

• Nifty 50 is trading above key moving averages, with resistance at 25,200 and support at 24,650.
• Bank Nifty needs to sustain above 56,000 to challenge its previous high of 57,842.
• A breakout above 25,200 for Nifty and 56,500 for Bank Nifty could confirm bullish momentum.

Conclusion

The stage is set for a potential rally toward record highs before Diwali 2025. While global uncertainties remain, the domestic setup—reforms, earnings, and liquidity—is highly favorable. Investors should watch for confirmation through earnings and policy announcements in the coming weeks.

Strategy:

Traders should monitor breakout levels and maintain disciplined stop-losses.

Long-term investors may consider accumulating quality stocks in banking, auto, and consumption.

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Suzlon Energy, a prominent player in India’s renewable energy sector, has witnessed a sharp correction in its stock price, falling for the fourth consecutive session. The stock has declined over 10.5% in just four trading days, despite strength in broader indices.

Key Factors Behind the Fall:

• Q1 FY26 Earnings Miss: While revenue and EBITDA were strong, net profit came in below expectations due to a ₹134 crore deferred tax charge. The company reported a net profit of ₹324 crore, which disappointed some investors.
• CFO Resignation: Group CFO Himanshu Mody has resigned, effective August 31, 2025. His departure has raised concerns about leadership continuity, as he played a key role in Suzlon’s financial turnaround.
• Sector-Wide Correction: The renewable energy and power sector is undergoing a valuation reset after a strong rally, leading to profit-booking across several stocks.

Financial Snapshot – Q1 FY26

Metric	Value	Year-on-Year Change
Revenue	₹3,117 crore	+55%
EBITDA	₹599 crore	+62%
Net Profit (PAT)	₹324 crore	+7%
Order Book	5.7 GW	Strong
Deliveries	444 MW	Record High
Net Cash Position	₹1,620 crore	Debt-Free

Analyst Commentary

Motilal Oswal: Reduced FY26 profit estimates by 25% due to higher tax rate. Maintains Buy rating with a target price of ₹80. Notes potential upside from new orders and regulatory support.

JM Financial: Highlights concern over installation delays. Projects EPS of ₹1.51 for FY26 and ₹2.31 for FY27. Target price: ₹78.

Axis Securities: Positive on execution and revenue visibility. Target price: ₹72 over 3–6 months.

UBS and Nuvama: UBS initiated coverage with a Buy rating and ₹78 target. Nuvama revised target to ₹67 due to softer EPC mix.

Investor Strategy

Short-Term Outlook: Expect continued volatility due to leadership changes and sector-wide correction. Traders should monitor support levels near ₹56 and watch for updates on CFO succession.

Long-Term Outlook: Suzlon remains fundamentally strong with a debt-free balance sheet, robust order book, and favorable industry dynamics. Most analysts maintain a bullish stance, with target prices indicating 20–35% upside from current levels.

Conclusion

The recent decline in Suzlon’s share price appears to be driven more by sentiment and short-term concerns than by any major deterioration in fundamentals. Long-term investors may consider this a buying opportunity, while short-term traders should remain cautious until technical and leadership clarity emerges.

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In a striking display of economic resilience, Japan’s stock markets surged to record highs on August 15, 2025, after second-quarter GDP data revealed stronger-than-expected growth. The benchmark Nikkei 225 index rose 0.59%, closing at an all-time high, buoyed by upbeat investor sentiment and renewed confidence in Japan’s economic trajectory.

GDP Surprise: Japan Outpaces Forecasts

According to preliminary data released by the Cabinet Office, Japan’s gross domestic product (GDP) expanded by 1.0% on an annualized basis in the April–June quarter, far exceeding the 0.4% growth forecast by economists. On a quarterly basis, GDP rose 0.3%, beating expectations of a modest 0.1% uptick.

This marks Japan’s fifth consecutive quarter of growth, a notable achievement given the headwinds from global trade tensions and domestic inflationary pressures.

Key Growth Drivers

Resilient Exports

• Net exports contributed 0.3 percentage points to GDP, reversing a 0.8-point drag in Q1.
• Auto exports remained robust despite US tariffs, with Japanese automakers absorbing costs to maintain competitiveness.

Capital Expenditure

• Business investment rose 1.3% in Q2, more than double the 0.5% expected in a Reuters poll.
• This reflects corporate confidence in long-term demand and supply chain stability.

Private Consumption

• Household spending, which accounts for over half of Japan’s GDP, increased 0.2%, beating forecasts of 0.1%.
• The pace matched Q1 levels, indicating steady consumer sentiment despite inflation.

Market Reaction: Nikkei Hits New Peak

The Nikkei 225’s rally was driven by:

• Strong earnings from export-heavy firms like Toyota, Sony, and Honda
• Optimism around Japan’s trade deal with the US, which lowered auto tariffs from 25% to 15% in July
• Expectations that the Bank of Japan (BOJ) may resume rate hikes later this year, signaling policy normalization

The yen also edged higher, trading at 147.6 per dollar, reflecting investor confidence in Japan’s macroeconomic outlook.

Policy Implications and Outlook

Bank of Japan’s Next Move

• The BOJ recently upgraded its fiscal 2025 growth forecast to 0.6%, up from 0.5%, citing wage growth and stable consumption.
• Analysts expect the central bank to consider tightening in October, especially if inflation remains sticky and corporate profits hold up.

Trade Risks Remain

• Despite the Q2 rebound, economists caution that US tariffs—especially on autos—could weigh on future growth.
• Toyota has warned of a $9.5 billion tariff impact this year, while Honda and Sony have revised their loss projections downward.

Political Ramifications

• The economic uptick offers relief to Prime Minister Shigeru Ishiba, whose coalition lost its upper house majority in July.
• A sustained recovery could bolster his standing ahead of next year’s general elections.

Conclusion

Japan’s second-quarter GDP beat has injected fresh optimism into financial markets, propelling the Nikkei to record highs and strengthening the yen. While the economy has shown remarkable resilience in the face of global headwinds, the path ahead remains complex. Trade tensions, inflation, and central bank policy will continue to shape Japan’s growth story in the coming months.

For now, investors are celebrating a rare alignment of strong data, policy clarity, and market momentum—a trifecta that has put Japan back in the global spotlight.

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Global brokerage firm Jefferies has forecast a short-term rebound in Indian equities, citing a combination of strong domestic inflows, improving earnings visibility, and easing trade tensions between India and the United States. While the recovery is expected to be brief, Jefferies believes the current setup offers tactical opportunities for investors, especially in select high-conviction stocks.

Market Context: A Year of Underperformance

Indian equities have lagged behind their emerging market peers over the past year. The MSCI India Index has underperformed the MSCI Emerging Markets Index by 24 percentage points—the widest gap in 15 years. Historically, such deep underperformance has often been followed by a catch-up phase, and Jefferies believes this pattern could repeat in the near term.

Key Drivers Behind the Predicted Rebound

1. Strong Domestic Inflows

• Equity mutual fund inflows surged 75% month-on-month in July to $6.4 billion—more than double the April–June monthly average.
• Other domestic institutions, including insurers, ETFs, and AIFs, have consistently been net buyers, averaging $2.8 billion per month in 2025 compared to $1.6 billion in 2024.
• These flows act as a buffer against foreign selling and provide sentiment support.

2. Valuation Reset

• India’s valuation premium to emerging market peers, which had spiked to 90% in March–April, has now reverted to its 10-year average of 63%.
• While MSCI India’s forward P/E remains about 10% above its long-term mean, broader valuation metrics—such as the bond yield to earnings yield gap—have normalized.

3. Seasonal Earnings Boost

• Jefferies expects a visible earnings pickup in the September quarter, driven by a low base (due to last year’s election-related slowdown) and an earlier Diwali, which could pull festive demand into Q2.

4. Foreign Investor Positioning

• Foreign portfolio investors’ India allocations are near decade lows.
• Large emerging market funds are just 0.2 percentage points overweight India versus the benchmark—far below the long-term average of 2.5 points and peak levels above 4 points.
• Even a modest rebalancing could add fuel to the short-term rally.

Jefferies’ Top 8 Conviction Picks

To capitalize on the expected bounce, Jefferies has highlighted the following stocks as high-conviction ideas:

1. Lodha (Macrotech Developers) – Real estate play with strong execution and demand visibility
2. Cholamandalam Investment & Finance – Benefiting from robust retail credit growth
3. Adani Energy Solutions – Positioned for infrastructure-led expansion
4. Shriram Finance – Strong presence in rural and semi-urban lending
5. Jubilant FoodWorks – Consumer discretionary with brand strength and expansion potential
6. Mankind Pharma – Pharma player with a growing domestic footprint
7. NTPC – Defensive utility stock with stable earnings
8. Crompton Greaves Consumer Electricals – Consumer durables with margin recovery potential

In addition, Jefferies reiterated its bullish stance on cement stocks, citing a pricing-led recovery that could support margins despite cost variability.

Caution: The Rally May Be Short-Lived

Despite the constructive setup, Jefferies warns that the rebound may not sustain for long. Key concerns include:

• An unfavorable value-versus-growth dynamic, with growth stocks still trading at rich valuations
• Rising equity supply that could absorb liquidity and cap upside
• Seasonal and base effects that may fade by the December quarter

Conclusion

Jefferies’ outlook suggests that Indian equities may be poised for a tactical upswing, driven by domestic liquidity, valuation normalization, and seasonal earnings support. However, investors should remain cautious, as structural challenges and global uncertainties could limit the duration of the rally.

For those looking to position for the short-term bounce, Jefferies’ conviction picks offer a curated basket of opportunities across sectors—from real estate and finance to consumer and energy.

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Radhakishan Damani, often referred to as the “Retail King of India” and admired for his Buffett-like investing style, is known for his quiet conviction and long-term bets. While most investors panic at steep declines, Damani remains unfazed—even when one of his long-held stocks, Aptech Ltd, has plunged nearly 70% from its all-time high. So, what does he see that others don’t?

The Stock in Question: Aptech Ltd

Aptech Ltd, a pioneer in non-formal education and vocational training, has been part of Damani’s portfolio since December 2015. His stake, held under his brother Gopikishan Damani’s name, currently stands at around 3%, valued at approximately ₹23 crore.

Despite the stock trading at ₹127 as of mid-August 2025—down from its peak of ₹423—Damani hasn’t exited. Instead, he continues to hold firm, signaling deep-rooted belief in the company’s fundamentals and long-term potential.

Business Performance: Mixed Signals

Aptech operates across diverse verticals including:

• IT training
• Media and entertainment
• Aviation and retail
• Beauty and wellness
• Banking and finance
• Preschool education

It serves both individuals and enterprises, with a global footprint. Financially, the company has shown impressive top-line growth:

• Revenue grew from ₹158 crore in FY20 to ₹476 crore in FY25—a CAGR of 24%
• Q1 FY26 alone saw ₹120 crore in revenue

However, profitability has been under pressure:

• EBITDA margins have declined in FY25
• Net profits have also seen a dip, raising concerns about operational efficiency

Valuation Metrics

• Current Price: ₹127
• All-Time High: ₹423
• PE Ratio: 35x (vs. industry median of 36x)
• 10-Year Median PE: 36x
• Industry 10-Year Median PE: 26x

Despite the fall, Aptech trades at a valuation comparable to its historical average, suggesting that the market still sees potential in its business model.

Why Damani Might Be Holding

Here are some possible reasons behind Damani’s continued interest:

1. Long-Term Vision

Damani is known for his patience. His biggest bet—Avenue Supermarts (D-Mart)—was held for years before it became a multibagger. Aptech may be another long-term play where he sees value beyond short-term volatility.

2. Sectoral Potential

India’s ed-tech and vocational training sector is poised for growth, especially with increasing demand for skill-based education. Aptech’s diversified offerings position it well to capitalize on this trend.

3. Turnaround Opportunity

With strong revenue growth and a wide footprint, Aptech may be undergoing a temporary margin squeeze. Damani might be betting on a turnaround in profitability once operational efficiencies kick in.

4. Insider Confidence

Damani’s continued stake signals insider confidence. For retail investors, this can be a cue to look deeper rather than react to price movements alone.

Risks to Watch

• Declining margins and net profits
• High PE ratio despite falling price
• Competitive pressure from newer ed-tech players
• Execution challenges in scaling enterprise business

Final Thoughts

Damani’s investment style is built on conviction, patience, and deep value. While Aptech’s stock has taken a beating, its fundamentals—especially revenue growth and sectoral positioning—remain intact. For investors willing to look beyond the noise, Aptech might still hold promise.

But as always, caution is key. Damani’s moves are worth watching, but they’re not a substitute for individual due diligence.

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