Mayuresh Joshi, Head-Equity Research at William O'Neil India, said second-quarter (Q2 FY25) corporate earnings have been soft. "The numbers are expected to remain a bit soft as we head to Q3 FY25, barring a few sectors. Overall, earnings will determine the market trend, which seems soft at this juncture and a time-wise and price-based correction can't be ruled out," the market expert told Business Today on Friday.
In response to a query on how to approach Adani Group stocks now, Joshi said, "The hit that these stocks took, a large part of improvement has happened with the positive sentimental news that has come through. Now what actually transpires is how Adani tackles all the filings as a group, which is something to be watched out for. In my sense, the stocks might just consolidate around the current levels. One should wait for the developments happening."
For the unversed, US authorities last week accused Adani, his nephew and executive director Sagar Adani and managing director of AGEL, Vneet S Jaain, of being part of a scheme to pay bribes to secure Indian power supply contracts and misleading US investors.
The Adani Group has denied the accusations in the US indictment as baseless and said it will seek all legal recourse. The Indian conglomerate also claimed that there were no bribery charges against Gautam Adani and other group executives.
Within the Adani pack, Joshi mentioned that Adani Ports and Special Economic Zone Ltd should be kept on the watch list. "The company has a unique and distinct business from what the other group stocks are doing. The company is a bit differently placed compared to the rest of the group," Joshi added. Adani Ports shares were trading 1.44 per cent higher at Rs 1,183.85 on BSE.
When asked about Zomato shares, he said, "There are tailwinds for the company. The quick-commerce space is expected to grow even further over the next few quarters as Zomato treads into newer geographies and semi-urban areas. And, the business model is in sync to the thesis that the market is going with." Zomato was down 1.08 per cent at Rs 283.
Answering a question on One 97 Communications Ltd (Paytm's parent), Joshi stated that from a valuation point of view, a large part is currently included there in the share price. "Now it is up to the earnings delivery. If Paytm can deliver better than what the Street expects, a re-rating can be anticipated. But a significant upside from current level is not plausible," he added. Paytm shares rose 0.77 per cent to trade at Rs 934.65.
Meanwhile, Indian equity benchmarks resumed upmove following a steep fall in the previous session. The domestic indices were up today led by gains in pharma, IT, energy and automobile stocks. However, the broader market (small- and mid-cap shares) was down.
The overall market breadth was slightly positive as 1,834 shares were advancing while 1,685 were declining on BSE.
Foreign portfolio investors (FPIs) offloaded Indian shares worth Rs 11,756.25 crore on a net basis during the previous session while domestic institutional investors (DIIs) purchased shares worth Rs 8,718.30 crore.