Other stocks include Tata Elxsi, Indraprastha Gas (IGL), AU Small Finance Bank, APL Apollo Tubes, Delhivery, Astral, and SBI Cards and Payment Services, which have fallen between 5% and 19% in the last 12 months.
The weakness in these stocks has been due to several factors, including company and sector-specific issues, as well as overall market sentiment since June following the general election results. Midcaps as a segment have also struggled over the past three months.The Nifty Midcap 100 index’s fall from its peak is still 7.5% despite a late recovery, and the index has delivered returns of 33% over the past 12 months. Meanwhile, the Nifty has yielded 22% during the same period.“The broader market is showing signs of stability following a recent downturn driven by several factors, including weak Q2 earnings, affected by election-related disruptions, stress in retail lending (particularly in microfinance and personal loans), and a slowdown in FMCG and festive consumption. Additionally, high inflation at 6.2% has dampened hopes for a near-term rate cut, further impacting market sentiment and triggering FII selling,” said Krishna Appala, Senior Research Analyst at Capitalmind Research.
“Aggregated Q2 earnings for midcaps reveal sluggish trends, with revenue growing 10.6% YoY and PAT increasing 9.8% YoY. Historically, such scenarios often lead to price or time corrections—or both—allowing valuations to align with earnings growth. At the sectoral level, some segments continue to present strong opportunities,” .
Q2FY25 earnings
An analysis of their earnings shows 5 companies reporting a decline in their July-September quarter net profit while 3 posted an year-on-year growth. Meanwhile, Vodafone Idea narrowed its losses and Delhivery turned into profits after reporting a loss in the corresponding quarter of the previous financial year.
APL Apollo, IDFC First Bank, SBI Card, IGL reported a double-digit decline in their Q2 profit after tax (PAT) while Astral’s bottomline fell by 4%. AU SFB, Bandhan Bank and Tata Elxi’s PAT jumped 42%, 30% and 15%, respectively.
As for the revenue, barring APL, all other companies reported a revenue uptick. While AUSFB, Bandhan Bank, Delhivery and IDFC First Bank posted a revenue uptick at 55-13%, IGL, Vodafone, SBI Card, Tata Elxsi and Astral recorded a single-digit growth.
Should you buy, sell, or hold?
Market expert Sudeep Shah, Deputy Vice President & Head of Technical and Derivative Research at SBI Securities, gives his take on these stocks:
- Vodafone Idea
The stock has been in a downtrend since July 2024, moving in a lower-high, lower-low formation on the daily chart. It has made a swing low of 6.60 and has shown signs of bouncing in the last two trading sessions. The level of 8.55 will act as immediate resistance, and a break above this level could push the stock to 9.9. - IDFC First Bank
The stock has been in a downtrend for over a year, since September 2023, and is now consolidating in the 62-67 zone for the last nine trading sessions. A breakdown below the 62 level is likely to drag the stock further down, while a strong breakout above 70 could ignite buying interest. - Bandhan Bank
The stock has been moving in a lower-high, lower-low formation, indicating a downtrend. The 168-170 zone acted as support for the stock previously. Any strong breakdown below the 168 level could lead to a continuation of the downtrend. A decisive breakout above the 185 level may lead to momentum picking up in the stock. - Tata Elxsi
The stock has shown signs of bouncing from the 6,400-6,410 zone, which acted as support on June 4. Since the high of 9,080 on August 27, 2024, the stock has lost steam and is moving in a lower-high formation. The immediate resistance for the stock is at the 7,065 level. - IGL
The stock has seen a heavy battering, falling nearly 44% from its high of 570 after the government reduced the APM allocation by 20%. The 320 level is likely to act as immediate support, with the next support at around 280. - AU SFB
The 550-555 zone is likely to act as strong support, and a breakdown below this level could take the stock to 525, where its next support is placed. A move above the previous swing high of 628 is likely to be positive for the stock. - APL Apollo
The stock has taken multiple supports around the 1,400 level since June 2024. It has risen 5% in two sessions, but for momentum to pick up, the swing high of 1,557 needs to be breached. A break below the support zones of 1,390-1,400 could drag the price to 1,340. - Delhivery
The stock has corrected nearly 23% in the last two months since its high of 448 on September 25, 2024. It has broken its previous support of 355, which is likely to act as resistance. A breakout above this level could be positive for the stock in the short term. - Astral
The stock has seen intense selling pressure since making a high of 2,454. The 1,740-1,745 zone is acting as immediate support, and the 1,820 level is likely to act as an immediate hurdle. A breakout above this level could be positive for the stock.
Analyst Kranthi Bathini, Director-Equity Strategy at WealthMills Securities, recommends avoiding Vodafone Idea and suggests that only investors with a very high-risk appetite should consider it. Bathini recommends a ‘Hold’ view for the rest.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)