 "Nestle, IndusInd, Bandhan, Asian Paints from BSE 500 index hit 52-week lows")
Share prices of Nestle India, Asian Paints, Bandhan Bank, Tata Technologies, AU Small Finance Bank and Avenue Supermarts, all a part of the BSE 500 index, have hit their respective 52-week lows on the BSE in Thursday’s intra-day trade after a sharp correction in the equity markets.
Aarti Industries, Chennai Petroleum Corporation, CreditAccess Grameen, Network18 Media & Investments, Procter & Gamble Hygiene & Health Care, and Prince Pipes and Fittings, from the index also hit their respective 52-week lows. These stocks were down up to 3 per cent on the BSE in intra-day trade today.
The key benchmarks, Sensex and Nifty faced another bear attack on Thursday, with the BSE Sensex crashing 1,162 points or 1.44 per cent to its intraday low of 79,020, while the NSE’s Nifty50 plunging 328 points or 1.35 per cent at 23,870 in intraday trade.
In four trading days, the Sensex has tanked 3.79 per cent, or 3,113 points, from the level of 82,133 on Friday, December 13.
Among the individual stocks, Asian Paints hit an over three-year low of Rs 2,268, down 3.3 per cent after two executives resigned from their positions. In two separate filings, the paints company announced the resignation of Vishu Goel - Associate vice president, retail sales, and Shyam Swamy, vice president, home improvement, décor, services, and retailing.
Thus far in the calendar year 2024, the stock price of Asian Paints has tanked 33 per cent, as compared to the 9.7 per cent rise in the BSE Sensex. The sharp underperformance of the stock is due to sluggish demand.
The paint industry faced a subdued demand environment during the September quarter (Q2FY25). Operating margins were impacted by the price reductions taken last year, higher material prices and increased sales expenses.
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On the margin front, Asian Paints said soft demand conditions, product mix, and material price inflation affected margins in Q2. The management, however, expects margins to recover in the coming quarters on the back of an anticipated softening in material prices coupled with price increases implemented in the past few months.
However, analysts anticipate a further market share erosion for the company, and believe investors should not catch a falling knife as the industry is going through structural change.
Avenue Supermarts shares, the parent company of DMart, hit a fresh 52-week low of Rs 3,552.95, falling nearly 2 per cent on growth concerns. The stock price of one of the largest food and grocery retailers in India has slipped 37 per cent from its 52-week high of Rs 5,484 touched on September 24, 2024.
DMart’s Q2F25 results missed street expectations due to lower store productivity. The like-for-like (LFL) growth fell to 5.5 per cent year-on-year (YoY), considerably lower from 9.1 per cent in Q1FY25, resulting in an H1FY25 LFL growth of 7.4 per cent.
An accelerated ramp-up of online grocery formats (quick commerce) in large metro cities led to a deceleration of key growth metrics for DMart. Overlap of consumers seeking convenience and shopping at DMart (value) appears to be higher than expected, which should continue to impact its growth trajectory.
Shares of Network18 Media & Investments hit a 52-week low of Rs 70.01, down 3 per cent in intra-day trade. In 11 months, the stock has tanked 45 per cent. It had hit a 52-week high of Rs 136.20 on January 19, 2024.
Network18 has a strong and diversified presence across media segments, including television, publishing, and digital media, and it is one of the largest assets of the Reliance Industries (RIL) Group in the media and entertainment segment.
Network18’s operating profitability and debt protection metrics are likely to remain under pressure over the medium term due to significant investments in digital initiatives. While the TV news business generates healthy operating profits, losses from the print and digital businesses led to a moderation in operating profitability at the Network18 group.
ICRA expects Network18’s revenues to grow by 8-10 per cent in FY2025, led by the strong market position of channels under its banner, along with a healthy increase in revenue from the digital business. This should also enable the company to improve its operating profitability.
As of March 2024, Network18 holds 50.994 per cent stake in Viacom18. However, on a fully diluted basis, post conversion of the compulsory convertible preference shares (CCPS), RIL, excluding Network18, will hold 70.49 per cent in Viacom18. RIL has intimated its intent to convert the CCPS into equity shares of Viacom18, leading to Viacom18 becoming a direct subsidiary of Reliance. Network18 will cease to exercise control over Viacom18. However, it will continue to hold its 13.54 per cent stake in the company.
Shares of AU Small Finance Bank fell 3 per cent to Rs 541, hitting its lowest level since July 2022. In three month, the stock has plunged 28 per cent due to a deterioration in its asset quality.
In Q2FY25, the bank witnessed an increase in slippages across its secured and unsecured portfolio. Credit costs surged to Rs 373 crore, accompanied by an increase in slippages to 3.25 per cent from 2.94 per cent in Q1FY25. In terms of composition, the secured-to-unsecured slippage mix shifted to 67:33 compared to 75:25 in the previous quarter.
AU Bank has historically commanded premium valuation multiples, attributed to its sustained loan growth, impeccable asset quality, and appealing return ratios. Nevertheless, the current environment presents challenges for the bank, and execution is more important than ever, analysts at Centrum Broking said in the company's results update.