HDFC Bank and Bajaj Auto were among major gainers in today’s trading session while Kotak Mahindra Bank, IndusInd Bank and Tata Consumer Products were dragging the indices down during the early trading hours. After gaining during the afternoon session on Friday, Indian markets were expected to show strength in today’s trade. However, markets turned negative during the first hour of trade. At time of publication, NSE Nifty was down by 46 points and biggest loser was Tata Consumer Products. Kotak Mahindra Bank announced quarterly results during the weekend that were not as per market expectations.

HDFC Bank was the only stock helping Bank Nifty. Traders are expecting a recovery in the market during the afternoon session, as per the CALL and PUT options data for Bank Nifty.

Kotak Mahindra Bank Shares Drop 5% Following Mixed Q2 Earnings

Kotak Mahindra Bank's shares fell by more than 5% on October 21, 2024, after the bank reported mixed second-quarter results. While revenue growth was stable, lower fees, higher loan losses, and slower-than-expected loan growth contributed to the decline in investor sentiment. Global brokerage Goldman Sachs maintained its Buy rating with a price target of Rs 2,286, indicating confidence in the bank’s long-term potential despite short-term challenges.

Q2 Earnings Miss Analysts' Expectations

1. Results Below Goldman Sachs' Forecasts

Kotak Mahindra Bank’s Q2 results were 5% lower than Goldman Sachs’ estimates and 2% below consensus, driven by several factors:

Lower Fee Income: A drop in fee-based revenue impacted overall profitability.
Higher Loan Losses: An increase in non-performing assets (NPAs) led to a rise in loan provisions.
Slower Loan Growth: Weaker-than-expected loan disbursements in the quarter weighed on the overall earnings.
These factors, compounded by a weak macroeconomic environment and RBI's embargo on certain lending activities, hurt Kotak Mahindra's performance, leading to a sharp drop in the stock price.

Goldman Sachs Maintains 'Buy' Call

2. Long-Term Confidence Remains Intact

Despite the mixed Q2 performance, Goldman Sachs reiterated its Buy rating on the stock, citing the bank's robust fundamentals and strong balance sheet. The brokerage firm set a price target of Rs 2,286, highlighting long-term growth potential driven by Kotak's focus on digital transformation and growing retail loan book.

Tech Mahindra Shares Rally 4% on Strong Q2 Results

Tech Mahindra witnessed a 4% rally in its stock price on October 21, 2024, after the IT giant posted steady Q2 earnings. The stock was one of the top gainers on the Nifty 50 index, as investors reacted positively to the company's performance in key verticals such as communications, Hi-Tech, and banking. Analysts maintained mixed views on the stock, with Nomura issuing a Buy call and Jefferies remaining cautious with an Underperform rating.

Steady Q2 Performance Across Key Segments

1. Broad-Based Growth

Tech Mahindra’s Q2 performance saw healthy growth across several verticals:

Communications and Enterprise segments drove revenues.
Strong momentum was observed in Hi-Tech, Retail, and Banking verticals, reflecting resilience in demand for IT services.
Nomura emphasized that the company's progress toward its medium-term goals was on track, marking Q2 as a beat on most metrics.

Analysts Remain Divided on Outlook

2. Differing Views on Stock Potential

Despite the strong performance, analysts had varying opinions:

Nomura maintained its Buy rating with a target price of Rs 1,900, indicating a 12.5% potential upside from the current level. The firm praised Tech Mahindra’s steady growth trajectory and long-term potential.
Jefferies, however, held an Underperform stance with a target price of Rs 1,440, citing concerns over profit margins. Jefferies acknowledged the revenue beat but pointed out that normalized profits missed estimates, leading to a more cautious outlook.

Godrej Properties Expands Footprint with New Project in Ahmedabad

Godrej Properties has acquired a 3-acre land parcel in Vastrapur, Ahmedabad for a new premium residential project. The development will feature 0.9 million square feet of saleable area, primarily consisting of high-end residential apartments. The estimated booking value of the project is Rs 1,300 crore, positioning Godrej Properties to strengthen its presence in the growing Ahmedabad real estate market.

Prime Location in Vastrapur, Ahmedabad

1. Strategic Land Acquisition

The newly acquired land is located in Vastrapur, a prime residential area in West Ahmedabad, known for its proximity to key landmarks such as IIM Ahmedabad, Vastrapur Lake Garden, and Sabarmati Riverfront. This location is expected to attract premium buyers due to its accessibility to business hubs like Navratna Business Park and Pinnacle Business Park.

Development Size: 0.9 million square feet of premium residential apartments.
Booking Value: Estimated at Rs 1,300 crore.

Strengthening Presence in Ahmedabad

2. Godrej’s Continued Expansion in Key Markets

This is Godrej Properties' second project in Ahmedabad, furthering the company’s strategy of deepening its presence in key Indian cities. According to Gaurav Pandey, MD & CEO of Godrej Properties, this acquisition aligns with the firm’s goal of expanding in micro-markets across India’s leading cities.

PNC Infratech Shares Fall 20% After Ministry Disqualification

Shares of PNC Infratech Ltd. plummeted by 20% on October 21, 2024, following news that the company and two of its subsidiaries were disqualified from participating in any tender process by the Ministry of Road Transport & Highways for a period of one year. The company was barred following an FIR and charge sheet filed by the CBI earlier this year, casting uncertainty over its future business prospects.

Disqualification from Ministry Tenders

1. Impact of CBI Investigation

PNC Infratech and its subsidiaries, PNC Khajuraho Highways Pvt. Ltd. and PNC Bundelkhand Highways Pvt. Ltd., were barred from bidding on new projects after an FIR and charge sheet were filed against them in relation to certain irregularities. The company faced a personal hearing on October 18, where the Ministry decided to disqualify the firm for a one-year period.

Period of Disqualification: October 18, 2024, to October 18, 2025.

Limited Impact on Ongoing Operations

2. Ongoing Projects Not Affected

PNC Infratech clarified that the disqualification will not affect its ongoing development, construction, or operations and maintenance (O&M) activities. However, the company acknowledged that the impact on future projects would be evaluated and disclosed as more information becomes available.