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The Indian market has begun its first earning season of the financial year ending March 2025. As initial results start coming in, the markets have already witnessed some sharp movements, with expectations of more volatility in the upcoming weeks.



To gain insights into what to expect from the June quarter earnings and the potential market reactions, we spoke with Dharmesh Kant, head of equity research at Chola Securities.



<h2 class="wp-block-heading">Markets Overview</h2>



&#8220;We were expecting an EPS (earnings per share) of around 1,035.50 for FY24 for the Nifty companies, which it delivered. What we have pencilled in for FY25 was only 12 to 14% of EPS growth on the Nifty 50 side. What we have pencilled in for FY25 was only 12 to 14% of EPS growth on the Nifty 50 side.&#8221;



&#8220;So that translates to around say 1,150 to 1,200 kind of an EPS for FY25. So if you take even 1150, markets are fairly priced. I mean, it&#8217;s not super high. Around 20-21 kinds of multiple, we are assigning that for the market. So 23,000 to 24,000 should be the fair value of the market,&#8221; said Kant explaining his view on the current market scenario.



He added that it was interesting that most analysts are pencilling in EPS growth in the mid-teens rather than in the high 21%-25% range as in the prior year. 



Kant further said that this year should see the bottom of the earnings degrowth cycle. &#8220;Next year onwards that is FY26 onwards it will again pick up in a big way and it will be again back to early 20s kind of EPS growth. And that is why you are not seeing any correction in the market even though we all are going with early teens kind of earnings growth forecast,&#8221; the analyst added.



<h2 class="wp-block-heading">Earnings In Focus</h2>



We asked Kant to share his views on some of the sectors that would be in focus this season and what the investors could expect from them.



<h3 class="wp-block-heading">Auto</h3>



&#8220;Automobile companies we have seen offering discounts and I mean they are branding it differently, but it is a price cut. The fact remains dealer inventories are very high and dealers are pressing OEMs (original equipment manufacturers) hard not to send vehicles until the inventory is cleared and that&#8217;s why such discounts have come into play.



&#8220;Quarterly volume numbers we have seen only M&amp;M, Maruti and HeroMoto Corp were able to record good year-on-year growth. The rest all were in single digits. The farm side, again, remains to be a problem. The monsoon in June was very bad. It has picked up a bit in July.&#8221;



<h3 class="wp-block-heading">Telecom</h3>



&#8220;Telecom is a space that has seen a re-rating. Most of the companies have taken price hikes that will help their ARPUs (average revenue per user). It was around ₹120, ₹130 kinds of levels when Jio was launched, and now it&#8217;s back to around ₹200.



Jio is behind what Bharti Airtel is commanding, in terms of ARPU (average revenue per user), but eventually, it will catch up. And going by Bharti Airtel&#8217;s management, an ARPU of ₹300 by next year is pretty much on the cards. It also seems likely going by the way the data usage and everything is panning out. So telecommunication will continue to be in a sweet spot.&#8221;



<h3 class="wp-block-heading">Pharma And Chemicals</h3>



&#8220;Pharma, I mean similar trajectory 15% to 20% kind of growth you can expect. So there will be a steady state, no margin depletion out there. Chemical, the buzz is that things are likely to improve. Some queries are happening from the European side and most of our speciality chemical companies, for example, Navin Fluorine or UPL, all supply majorly to the European market.



&#8220;So chemical is one space, which has had a couple of bad years both earnings-wise and at the bourses. But, now it seems that some traction is getting built. So we have to wait for the management commentary. But it looks like they will start getting some better businesses and that will drive the stocks going forward. So that sector looks interesting at the current juncture,&#8221; Kant noted.



<h3 class="wp-block-heading">Oil and Gas</h3>



&#8220;Oil and gas does not look like it&#8217;s going to throw any surprises. It will continue the way it is. The refineries will continue the way it is and it&#8217;s difficult to predict because the government can intervene anytime on the pricing of petroleum products. But the good part is I don&#8217;t see crude oil going anywhere. It&#8217;s very comfortable in the zone of $80 to $90. 



&#8220;It will continue to do so and with more and more hybrid and EVs coming into play, there will definitely be pressure on the oil basket which is good for companies like oil refiners. It should bode well from a trading perspective,&#8221; he said.



<h3 class="wp-block-heading">Information Technology</h3>



&#8220;Even if the status quo is maintained, it would be good enough. I mean, if TCS and Infosys maintain the same guidance, and they just talk about the dealings and better visibility going forward, it should be fine,&#8221; Kant said.



&#8220;I don&#8217;t see any material change in the guidance of IT companies or any positive developments happening out there. All the discussion is about what will happen after the new government comes to the US.



&#8220;One point of caution out here is that it was Donald Trump — who is likely to win back this election — who forced IT companies to give more on-shore jobs than offshore and that led to the increase in the cost of most of the IT companies and that led to the decrease in the EBIT margins. If he comes back, I mean he will continue with the same policy, he will be harsher this time around, with more jobs for Americans and that will not set well with most of our large-cap peers in the basket,&#8221; he added.



See Also: <a href="https://in.benzinga.com/content/39504363/motilal-oswal-expects-up-to-16-earnings-spurt-for-nifty-sees-strong-momentum-over-next-3-6-months" target="_blank" rel="noreferrer noopener">Motilal Oswal Expects Up To 16% Earnings Spurt For Nifty, Sees Strong Momentum Over Next 3-6 Months</a>



<h2 class="wp-block-heading">Budget Expectations</h2>



Next week will also see the first budget presentation from the newly formed government. We asked the analyst, what he expects from the upcoming budget.



&#8220;As far as the budget is concerned I think if they don&#8217;t change anything and just go by the interim budget whatever announcements were there it would be good for the markets,&#8221; Kant said.



He added that the &#8220;only worry is some social balancing may happen in the budget and some tinkering with the capital gains tax on the equities may come through.&#8221;



<h2 class="wp-block-heading">The Inflows In The Market</h2>



The market has been seeing a consistent inflow of funds through mutual funds, surging to ₹40,608 crore in June — a record high. So we asked Kant what he thought about the trend and its impact on the market.



&#8220;I mean, supply is the same. In fact, it has reduced because people are very bullish from the long-term perspective, say, five or 10 years. So whatever investment they have made, nobody wants to sell that. And most of them are sitting on a 2x-3x kind of profit. 



&#8220;So the supply of free float has reduced and sector-specific, theme-specific mutual fund buying has increased. The demand has gone up substantially, if you have ₹22,000 odd crore every month going for sector-specific funds, you will have railway and defence shooting up through the sky and that is what is playing out. So this is a liquidity-driven market.



&#8220;The story is fine, everybody is on the same page as far as the structure story of defence or railways is concerned, we all are convinced about that. But the recent run-up has been because there are arguably no sellers in the market.



&#8220;So frankly speaking as of now I don&#8217;t see a reason why the market should correct but in terms of valuation, there is no way I can justify to you right now based on, say, two or three years kind of a time frame that these valuations are fine,&#8221; he said.



Read Next: <a href="https://in.benzinga.com/content/39873650/more-balanced-taxation-framework-coindcxs-sumit-gupta-on-expectations-from-the-budget">&#8216;More Balanced Taxation Framework&#8217;: CoinDCX&#8217;s Sumit Gupta On Expectations From The Budget</a>

&#34;As far as the budget is concerned I think if they don&#39;t change anything and just go by the interim budget whatever announcements were there it would be good for the markets,&#34; Kant told Benzinga India.

Chola Securities&#39; Dharmesh Kant On Earnings Season, Budget And Record Inflows

As we near the first budget presentation of the returning NDA government, people and entrepreneurs from all sections will have their wishlists. One industry that would be especially tuned in is the crypto Industry.



We sat down with CoinDCX CEO Sumit Gupta to talk about his expectations from the budget and the future of the industry going forward.



<h2 class="wp-block-heading">Budget Expectations</h2>



We asked Gupta his perspective on what would the crypto industry want to see in the budget and more importantly what it hopes will not feature in the budget.



&#8220;This is an emerging technology, everyone believes in the potential of Blockchain but having a taxation framework that essentially discourages anyone from even touching this asset class and not leveraging the potential of Web 3 is going to have a long-term negative impact,&#8221; Gupta said.



He further said that the community would like to see a &#8220;more balanced taxation framework.&#8221; Gupta thinks that crypto assets should be treated similarly to equities. &#8220;You have stocks on one side and then you have crypto on another side, the properties are similar, the risks are similar, so the treatment should also be similar,&#8221; the CEO told Benzinga India.



He argued that the absence of such a framework would deter companies from adopting Web 3. Another ask of Gupta is to increase industry consultation.



He said consultation happens &#8220;but working out a structure where industry and the government come together, discuss the pain points and then come up with a regulatory framework which balances things would be important.&#8221; He thinks that such consultation would help prepare everyone better &#8220;as technology moves very fast and if we set rigid regulations right now, they may not be even relevant one year, or two years down the line.&#8221;



Lastly, Gupta said that clear regulations are a thing that the industry would like to see in this budget. &#8220;The right regulatory framework is something that is going to be a billion-dollar problem or rather a trillion-dollar problem to solve because the industry can add $1.1 trillion to the country&#8217;s economy over the next 10 years. But if we don&#8217;t solve it, and if we sort of kill it prematurely, then all of that value will not be captured by India,&#8221; Gupta added.



See Also: <a href="https://in.benzinga.com/content/39349875/we-plan-to-add-3-000-new-customers-in-fy25-tac-infosecs-ceo-plans-to-become-worlds-leading-vulnerabi">&#8216;We Plan To Add 3,000 New Customers In FY25&#8217;: TAC Infosec&#8217;s CEO Plans To Become World&#8217;s Leading Vulnerability Management Company</a>



<h2 class="wp-block-heading">Impact Of Regulatations</h2>



The last year has seen two major changes being introduced in the crypto industry. The first was the declaration of TDS on crypto assets, and the second was the curbs on international crypto exchanges. We asked Gupta about the impact these regulations had on the company&#8217;s journey and the industry at large.



&#8220;I believe regulations are a good thing. It helps in the balanced development of the markets. But regulations have to be progressive. So both the developments that have happened, in my opinion, are good for the industry, good for the ecosystem,&#8221; Gupta said. He adds that it is better to have some sort of taxation than to have no framework in place.



He, however, added that when the announcement was made, &#8220;the volumes fell suddenly because the taxation is on the higher side. In fact, for a lot of people, it makes investing in this new asset class less attractive. I think that was not the best way to structure the taxation.&#8221;



&#8220;When international exchanges got banned or they were asked to get a registration, that is great for customers because then every player who is serving them, they have some supervision from a government authority. So the probability of something going wrong goes down.&#8221;



<h2 class="wp-block-heading">Acquisitions</h2>



Earlier in the year, the company announced the acquisition of BitOasis, a digital asset trading platform operating in the Middle East and North Africa. We asked Gupta about the story behind the acquisition and plans for the company&#8217;s expansion.



&#8220;We invested in BitOasis right around 12 months back — it was for a minority stake. We saw the progress of the company, it showed great performance, it was profitable, and was also the market leader. So all of those things gave us good conviction that, ok, this is the company that we want to back.&#8221;



He added that BitOasis will continue to operate with its current and existing team with the support and learnings of CoinDCX. &#8220;The brand will also continue as is and we will continue to look at the MENA market under the BitOasis brand, of course, housed under a common group,&#8221; Gupta added.



When asked if the company has any other plans to expand to newer regions, Gupta said that the company has been eyeing a few markets. &#8220;Some of the regions that we have identified, and are seriously looking at are Turkey, then Europe is interesting, Southeast Asia is also there, Australia is also a region we have an eye on but we are not looking to expand to all these places in one go, but in a more phased manner.&#8221;



<h2 class="wp-block-heading">Where Is The Industry Headed?</h2>



We asked the founder what are some of the changes he thinks the industry will see over the coming years. He replied, &#8220;One is that institutional money would come into the sector and make it part of the mainstream. For example, if an institution has $100 million in assets under management, part of that will be deployed into Bitcoin or some other top crypto asset. So institutions adopting this asset class is one big theme that will come out over the next one or two years.



The second theme as I mentioned is the regulations and it is not going to happen five years down the line, it is starting now.&#8221; He adds that slowly every country will be coming out with clear regulations for the space and that would help establish the industry in the mainstream.



&#8220;The other broad theme I feel will happen is that you will see more Blockchain-based applications coming and not everyone will become an Amazon or Facebook. But you will see some early successes,&#8221; the founder added.



Read Next:<a href="https://in.benzinga.com/content/39504363/motilal-oswal-expects-up-to-16-earnings-spurt-for-nifty-sees-strong-momentum-over-next-3-6-months"> Motilal Oswal Expects Up To 16% Earnings Spurt For Nifty, Sees Strong Momentum Over Next 3-6 Months</a>

Gupta thinks that crypto assets should be treated similarly to equities. &#34;You have stocks on one side and then you have crypto on another side, the properties are similar, the risks are similar, so the treatment should also be similar,&#34; the CEO told Benzinga India.

&#39;More Balanced Taxation Framework&#39;: CoinDCX&#39;s Sumit Gupta On Expectations From The Budget

Indian stock market is set to continue its bull run powered by earnings growth and normalised monsoons which will boost consumption, according to Siddhartha Khemka, senior group vice president and head of research broking and distribution at Motilal Oswal Financial Services. 



In an exclusive conversation with Benzinga India, Khemka pointed out that strong gross domestic product growth and continued government capex augur well for the market.



Regarding the high valuations in the market, Khemka said to focus more on earnings growth than valuation. Here are the edited excerpts from the conversation:



What are your expectations for the coming quarter? The markets have been making all-time highs despite seeing a correction on June 4.



Markets have hit all-time highs after return of the government, which ensures policy continuity and continued momentum for GDP growth. In FY24, the GDP growth was more than 8%. The expectation is at about 6% to 7% for this year&#8217;s GDP growth. Global markets are also at an all-time high. They are also coming out of an economic slowdown and inflation has eased. 



Although there has been a delay in the U.S. Fed's rate cut from two or three cuts this year to just one cut. The expectation for next year is for three to four rate cuts. The corporate earnings in US markets have been strong so that is also driving the US markets.



For FY25, we are expecting an earnings growth of 15% to 16% on a high base of FY24. On a one-year forward PE (price to earnings), Nifty is trading at 20.5 times. The 10-year average is around 20x, so we are marginally above that. So in terms of valuation, Nifty is not that high and with earnings growth, policy continuity, above normal monsoons would help ease inflation and drive consumption, especially in rural areas. 



Finally, FIIs (foreign institutional investors) have been selling in the last couple of months. Once the interest rate cuts start, FIIs are likely to come back and gradually start buying. so these are the factors based on which we believe Market momentum would continue for the next three months or six months.



See Also: <a href="https://in.benzinga.com/content/39497716/bharti-airtel-shells-out-6-857-cr-on-more-spectrum-to-boost-4g-5g-services">Bharti Airtel Shells Out ₹6,857 Cr On More Spectrum To Boost 4G, 5G Services</a>



Will the government's focus on consumption after the election verdict affect the funding for PSUs, railways and infrastructure?



I don't see government capex spending slowing down. The first decision that the government has taken is to build 3 crore houses under PMAY (Pradhan Mantri Awas Yojna). Recently they gave orders for <a href="https://in.benzinga.com/content/39370745/hal-shares-rockets-over-5-on-defence-ministrys-request-for-helicopters-in-deal-valued-at-45-000-cr">₹45,000 crore defence helicopters. </a>Since the election is over, the government will start working on a lot of infrastructure projects. 



I don't think the government will worry much about consumption because aggregate demand is improving. Companies are taking price hikes. The government's priority remains in capex for capacity building.



Does the expensive valuation cause problems for the investors?



While Nifty is trading at comfortable valuations, some of the sectors have moved up sharply in a short span and are currently trading at high valuations. If you are looking for fresh entry into some of these sectors, then I would certainly advise some caution or better wait for any correction as an opportunity to enter. 



Overall, I would focus more on earnings and sectors which have high earnings outlook. In this regard, auto stocks, banking financials, and capital goods are showing good earnings growth. Cement also has decent earnings growth of 14-15%. We are seeing strong growth for consumer durables with 30% to 40% growth this year. Metals also on a low base would have strong earnings growth.



The earnings growth is weak among chemicals. For IT we are expecting a 12% earnings growth in FY25 compared to 4% in FY24. So there are not many sectors that you can avoid because the overall growth trajectory is decent.



Is private sector capex picking up?



There are some signs it is picking up. But this year it will mostly be government capex doing the heavy lifting. Some of the companies are doing capacity expansion. Especially auto and cement companies. Companies generally start planning for the expansion once capacity utilization reaches 75% to 80%. 



The orderbook of capital goods or infrastructure companies also gives indications of whether capex is picking up. If you look at some of these companies like L&amp;T, ABB, and Siemens, they are seeing a good inflow of orders.



What do you make of the SIP Inflows? Data shows retail investors were trying to buy the dip on June 4.



It's a smart and right thing to do. We have been saying that retailers should buy on panic days and not sell. The efforts from AMFI (Association of Mutual Funds in India), SEBI (Securities and Exchange board of India) and AMCs (asset management companies) to educate the retail investors in the last so many years have started to pay off. They are now putting money in equities in a guided way, through a fund manager.



They are not buying for two or three days. They are buying with an investment horizon of five to ten to 15 years. If an investor can add some positions during the dip, they get units at 5% to 6% down which would help in the overall growth. It shows the maturity of the Indian retail investors of not selling on panic days.



I don't see SIP (systematic investment plan) inflows slowing down. Retail penetration in India is still around 4-6%. With more financial awareness more people would come into equities. Fixed deposits can no longer beat inflation. So mutual fund inflows are only going to increase on an aggregate basis. We have around 15 crore demat accounts now. It is expected to double in the next four to five years.



Read Next: <a href="https://in.benzinga.com/content/39497298/hal-declares-13-dividend-check-record-date">HAL Declares ₹13 Dividend, Check Record Date</a>

Indian stock market set to continue bull run due to earnings growth, normalised monsoons, strong GDP &amp; government capex says Motilal Oswal. 

Motilal Oswal Expects Up To 16% Earnings Spurt For Nifty, Sees Strong Momentum Over Next 3-6 Months

The Indian IPO market has been all the buzz this year. Several companies that have decided to go public have received an incredible response from investors. One of the year&#8217;s best-performing IPOs was TAC Infosec. The cybersecurity firm made a remarkable debut on April 5, opening at ₹290, a massive premium of 173% over the issue price of ₹106 on the NSE SME platform. 



Last month, the company also reported its first financial results after going public. The Vijay Kedia-backed company reported a 17% increase in operating revenue, reaching ₹11.84 crore in FY24 from ₹10.09 crore. In H2 FY24, the company&#8217;s profit surged to ₹4.4 crore from ₹1.92 crore in the first half, while operating revenue jumped 30% to ₹6.59 crore in the second half of the year.



We caught up with the company&#8217;s CEO Trishneet Arora to learn about the company&#8217;s journey to the IPO, insights into the results and the plans for the year ahead.



<h2 class="wp-block-heading">Going Public</h2>



&#8220;Oh, the journey was amazing to be very honest,&#8221; this is how Arora describes the whole IPO experience. He added during the whole process he also got to learn a lot of new things. &#8220;We were able to build new processes in the organisation while we were preparing for IPO, which was not in place and it&#8217;s required for a public company, and we could immediately implement them. So, yeah, the journey was amazing to be very honest,&#8221; he added.



On being asked about the difference between operating as a private company compared to a publicly listed company Arora told Benzinga India, &#8220;I think both of them have their own pros and cons. I can definitely say that compliance is not a pressure, compliance is a must to do thing. Compliance helps you to streamline the processes within the organization.&#8221;



See Also: &#8216;<a href="https://in.benzinga.com/content/39081008/strong-performance-despite-slowdown-in-developed-markets-eclerx-services-ceo-on-q4-print">Strong Performance Despite Slowdown In Developed Markets&#8217;: eClerx Services CEO On Q4-Print</a>



<h2 class="wp-block-heading">The Results</h2>



&#8220;We remained profitable at the same capacity that we were last year despite building new products, partnerships etc. And I think it&#8217;s good,&#8221; Arora said. He also added that this year was different for the company because it took the company 2.5 years to get 100 customers on board but just in April 2024 the company got 105 new customers from 21 countries.



Talking about the jump in profit in the second half of the year Arora said that this is a trend that the company witnesses. &#8220;December last quarter in the US helps us and the last quarter in India (March quarter) also helps us to increase the numbers from the sales point of view.&#8221; He added that the company plans to keep the margins at the same levels for the year ahead as well.



When asked how the company plans to do that, while growing the business, Arora explained with an example. &#8220;We are expanding in the Middle East. So what we are doing is first we are expanding in the UAE, then we&#8217;ll go to Saudi, and we will build the cash flow in the UAE. So whatever earnings that we are getting, we spend that particular amount in Saudi and build the Saudi business. So then it does not have an impact on our margin or on our cash flow.&#8221;



<h2 class="wp-block-heading">The Macro Environment</h2>



One of the major hindrances faced by the IT sector in the last few years has been the hawkish macro environment. So we asked Arora whether he sees things changing this year.



&#8220;Honestly, yes the US and the UK have been in a tough phase for the past 1, 1.5 years that has been hitting the numbers for companies like us. But cyber security has become a need of the hour. It&#8217;s a centre point of anything that we discuss around digitalization or infrastructure.&#8221;



He added that while he does not see a lot of challenges going forward, the bleak macro environment does affect the momentum of the company&#8217;s growth.



<h2 class="wp-block-heading">The Expansion</h2>



Talking about the company&#8217;s expansion plans, Arora said that by the end of March 2025, the company is aiming to bring 3,000 new customers on board and &#8220;by March 2026 we are aiming to bring 10,000 new customers on board and become one of the largest vulnerability management companies in the world&#8221;



Read Next: <a href="https://in.benzinga.com/content/38778075/faster-growth-steady-margins-latentview-analytics-cfo-reveals-strategy-post-q4-ebitda-surge">Faster Growth, Steady Margins: LatentView Analytics CFO Reveals Strategy Post-Q4 EBITDA Surge</a>

Talking about the company&#39;s expansion plans, Arora said that by the end of March 2025, the company is aiming to bring 3,000 new customers on board.

&#39;We Plan To Add 3,000 New Customers In FY25&#39;: TAC Infosec&#39;s CEO Plans To Become World&#39;s Leading Vulnerability Management Company

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