YES Bank Ltd, Tata Motors Ltd, IndusInd Bank Ltd, AU Small Finance Bank Ltd, Indian Oil Corporation Ltd (IOC) and Avenue Supermarts Ltd (DMart) are among largecap BSE100 stocks that have fallen up to 40 per cent from their 52-week high levels.
IDFC First Bank Ltd, Indian Railway Catering And Tourism Corporation Ltd (IRCTC) and Punjab National Bank Ltd also declined 20-28 per cent, as Q2 earnings disappointed for many of these companies.
Shaes of YES Bank Ltd have fallen 39.31 per cent from their 52-week high level of Rs 32.81 hit on February 9. Even as YES Bank reported a 2.5 times surge in Q2 profit, Kotak Institutional Equities said stress in retail loans offsets the positives.
"We maintain SELL rating (fair value at Rs 18 from Rs 19 earlier) as we watch through the developments in the retail loan book. Lower provisions aided earnings recovery off a low base," Kotak said.
Kotak said YES Bank's trends are still quite volatile given the impact of provision released from the redemption of security receipts.
"The bank continues to make progress in rebuilding the franchise. Deposit mobilisation is strong and visible in CASA growth (30 per cent YoY) and cost of deposits (largely unchanged in recent quarters). Pressure on NIM due to shortfall in PSL compliance, that is currently parked in low-yielding investments (RIDF), is likely to continue in the medium term although the bank is making efforts to reduce its impact," Kotak said.
Shares of IndusInd Bank are down 37.37 per cent from January high of Rs 1,694.35. IndusInd Bank’s Q2FY25 earnings missed the Street estimates on account of softer margins, weak operating performance, and an additional provisional buffer. Nirmal Bang has downgraded the stock to 'Hold' from 'Buy' and suggested a lower target price of Rs 1,443 from Rs 1,653.
"In our view, the stock will see an overhang in the near term due to (1) Slowdown in loan growth (2) Stress in some secured and unsecured loan segments and (3) The pending RBI approval for Sumanth Kathpalia’s tenure extension (current tenure which will expire in March 2025 was renewed for 2 years as against the expectation of 3 year extension)," it said.
Tata Motors Ltd shares are down 31 per cent from July 30 high of Rs 1,179.05. InCred Equities said: "JLR’s Q2 Ebitda margin collapse of 320 bps YoY on just a 6 per cent YoY dip in net sales disappoints. Despite a superior product mix, weak ASP (down 4 per cent QoQ), easing gross margin and rising variable marketing expenses are areas of concern. The management blames supply challenges and quality issues for weak Q2 and expects to meet its full-year EBIT margin guidance," it said.
Considering the weak global demand, Chinese competition and guidance cuts by other premium car makers, InCred Equities cut its Ebitda estimates for Tata Motors by 8-14 per cent for FY25F-27.
IOC and AU Small Finance Bank shares are down 29 per cent from their 52-week high levels.
On IOC, Nomura India said: "We sharply cut FY25F Ebitda by 38 per cent to reflect 1H performance and factoring higher LPG under-recoveries. We also cut FY26F Ebitda by 16 per cent further building in LPG under-recoveries, lowering GRM estimate to $7 a barrel and lowering petchem Ebitda , which is partly offset by raising auto fuel marketing margin to Rs 4 per liter."
The brokerage retained 'Buy' on the IOC stock with a lower target of Rs 175. Emkay Global said AU SFB beat its Q2 earnings estimates due to lower operational cost, which was partly offset by higher LLP.
"We have revised our earnings upward for FY25-27E by 4-5 per cent, and expect the bank to deliver 15-17 per cent RoE. We retain REDUCE with target price of Rs 625, rolling forward on 2.3x Sep-26E ABV," it said.
Avenue Supermarts (down 29 per cent), IDFC First Bank (down 28 per cent), IRCTC (27 per cent), PNB (26 per cent), Colgate-Palmolive (India) (25 per cent) and Asian Paints (down 25 per cent) saw steep falls from their one-year high levels.
ONGC, Tube Investments, Hero MotoCorp, Cholamandalam Investment, Bharat Forge, Coal India, Adani Enterprises and Trent Ltd fell over 20 per cent each.
Bajaj Auto, Dabur India, Tata Consumer Products, Havells India Ltd, Hindustan Aeronautics (HAL), Tata Steel, Reliance Industries, GCPL, Ambuja Cements and Shree Cement also declined over 20 per cent each.
"Q2FY25 earnings so far, have made investors jittery and we have seen stocks of companies reporting weak earnings/ weak outlook correcting," JM Financial said.
"There is a slowdown in urban demand seen across FMCG, retail, auto and mall operators. Chemicals and consumer durables have also seen a moderation in demand; MFIs and select private sector banks/ NBFCs witnessed stress in their unsecured book," it said.