Indian markets were trading lower as PSU banks and Adani Group stocks were dragging the markets down. Among gainers were PAYTM, Indus Towers, Grasim, Tata Steel, Hindalco and Suzlon Energy. Markets have seen buying at lower levels but we can expect a negative closing for today's trading session. PSU banks have witnessed recovery during the last one hour of trade.

Supreme Court Ruling Brings Major Relief to Vodafone Idea, Indus Towers

Tax Credits Approved for Infrastructure Duties: The Supreme Court has ruled in favor of telecom and tower companies, including Vodafone Idea, Bharti Airtel, and Indus Towers, allowing them to claim Central Value-Added Tax (Cenvat) credits on duties paid for critical infrastructure components such as tower parts and shelters.

This landmark decision overturns the Bombay High Court's earlier ruling, which denied Cenvat credit eligibility by classifying these components as non-capital goods. The Supreme Court’s decision upheld a Delhi High Court ruling in Indus Towers' favor, potentially reducing the company’s contingent liabilities by Rs 3,704 crore.

Brokerage Recommendation: Citi has maintained a 'Buy' rating on Indus Towers with a target price of Rs 485. Despite a 28% stock correction since the July 30 share buyback announcement, Citi noted several overlooked positive developments in the company's trajectory.

Kotak Equities Assigns Rs 5,200 Target Price for IndiGo

IndiGo Positioned for Growth: Kotak Institutional Equities has reiterated its bullish stance on InterGlobe Aviation (IndiGo), assigning a 'Buy' rating with a price target of Rs 5,200. This target reflects a 28% upside from the current levels.

The brokerage emphasized IndiGo's favorable positioning in the aviation market amid a supply crunch for competitors. Kotak highlighted IndiGo’s operational strength and ability to capitalize on growing domestic and international demand.

PSU Bank Stocks Under Pressure Amid Market Weakness

Heavy Losses for Public Sector Banks: Public sector banks witnessed significant declines during Thursday’s session, with the Nifty PSU index dropping nearly 5%. Major players such as SBI, Canara Bank, PNB, and Bank of Baroda bore the brunt of the sell-off.

SBI: Fell 5% to Rs 761.55.
Canara Bank: Dropped 5.4% to Rs 92.52.
PNB: Declined 6% to Rs 94.81.
Bank of Baroda: Led the losses, plunging 7.3% to Rs 219.85.
Weak market sentiment and profit booking were key drivers of this downturn, which overshadowed broader positive developments in the banking sector.

Bernstein Boosts Paytm Target Price to Rs 1,000

Optimistic Outlook for Paytm: Global brokerage Bernstein has raised its target price for Paytm from Rs 750 to Rs 1,000, maintaining an 'Outperform' rating. This revision reflects growing confidence in the fintech giant's ability to scale operations and deliver value.

Bernstein highlighted a shift in discussions surrounding Paytm, moving from survival concerns to evaluating potential scenarios that focus on operational efficiency and growth prospects.

Suzlon CEO Sees Sustained Growth in Wind Energy

Wind Energy Poised for Expansion: After achieving a debt-free status, Suzlon Energy is focusing on leveraging India’s wind energy potential. J.P. Chalasani, Suzlon Group CEO, emphasized the sector’s eight-year growth runway, driven by increasing demand in key industries such as defense and railways.

Morgan Stanley Upgrade: The brokerage has upgraded Suzlon to 'Overweight,' with a target price of Rs 71 per share, citing the company’s strong business moat and growth opportunities. Morgan Stanley also described the recent stock correction as an opportunity for accumulation.

Adani Green Cancels Bond Sale Amid US Charges

Allegations of Bribery and Obstruction: Adani Green Energy Ltd. has withdrawn its $600 million US dollar bond offering following allegations of bribery involving Gautam Adani and other executives. US prosecutors have charged the Adani Group with offering $265 million in bribes to secure solar energy contracts with Indian government entities.

The US Department of Justice (DoJ), along with the SEC, also alleged attempts to obstruct justice by deleting electronic evidence and misleading investigators. As a result, shares of Adani Group companies fell sharply, with losses ranging between 10% and 20% during Thursday’s trading session.

Market Impact: The allegations have raised concerns over corporate governance within the Adani Group, further exacerbating the sharp declines seen across its portfolio companies.