Jun-24

Monthly Overview

Key Observations of May 2024

Being the election period, May 2024 happened to be volatile month as market witnessed significant swings on the both
the sides. In spite of achieving a new all-time high above 23000, Nifty failed to hold on to the same and saw a sharp profit
booking just ahead of the election results on 4th of June. With the poll outcome expected on the coming Tuesday and the
first indications from the exit poll on Saturday, most brokerages are pencilling in an NDA victory. The opinions are spread
out on the extent of the victory, but the consensus is that the NDA would still form the government. Once the stability
issue for the next 5 years and the reforms agenda are finalized, the next big trigger would be the full budget presentation,
around mid-July. Brokers are suggesting 75:25 mid in favour of large caps; post the poll results.

The Marco highlights during the MAY month were:

 Mutual funds infused Rs1.30 trillion into Indian equities in year 2024. Mutual funds infused Rs23,010 crore in January,
Rs14,295 crore in February, Rs44,233 crore in March, Rs20,155 crore in April, and Rs26,038 crore in the first half of
May 2024. During the same period, FPIs had pulled out Rs25,000 crore from India amidst rising political uncertainty
and elevated VIX levels. This support from the domestic MFs, LIC and the vast army of retail investors and HNIs; has
helped Indian markets rally in tough times.

 The government is likely to update the base year of the Consumer Price Index from 2012 to 2024. This will also be
applicable to the calculation of GDP, WPI inflation and IIP. The new base years will come into effect from 2026. The CPI
basket is also likely to be modified in line with the HCES 2022-23 survey. That would effectively mean a reduction in the
weightage of food in the CPI basket. The final decision regarding the base year change will be taken after elections.
Currently, 2011-12 is the base year for GDP, IIP and of WPI.

 Indian export data is throwing up some positive surprises for the Indian economy. Now, smartphones have emerged as
the fourth largest item of export, with 42% growth yoy. Clearly, the PLI policy of the government for smartphones has
been well timed to capitalize on the China plus one strategy that the global corporations were adopting. In FY24, the
export of smart phones touched $15.6 billion. The key markets for Indian smart phone exports are the US, UAE, the
Netherlands, UK, and Italy in the value order.

 In April 2024, the investments by private equity funds and VC funds fell 35% to $4.4 billion, according to an EY report.
The figure was $6.8 billion in the year-ago period. Amidst global uncertainty, Red Sea crisis and the local political
uncertainty, the PE fund remained cautious. During the month, there were 9 large deals of over $100 million,
aggregating to $3.1 billion. That is nearly half of the big deals in April 2023. Interestingly, buyouts doubled to $2.1
billion. There were 54 start-up deals worth $756 million.

 The dividend payout by Indian companies stands at a 5-year low. The nearly 2,400 companies that have declared
results for FY24 have paid out total dividend of Rs4.04 trillion for the fiscal year. The dividend payout ratio at 34.83% is
the lowest in the last 5 years. Even the Nifty 50 companies have been less than generous this year in dividend payout.
The dividend payout ratio of the Nifty 50 basket has fallen in FY24 to 37.1% from 42.5% in FY23. Nifty stocks accounted
for 60% of the total dividend paid out by India Inc. However, rupee dividends are still higher yoy.

2
Monthly Overview

SECTORIAL UPDATES

AUTO:

 NSE Indices have launched the first EV index to give a separate entity to the electrical vehicles ecosystem. The
base date for the index will be April 02, 2018 and the base value will be 1,000. This index is likely to facilitate the
creation of such index products on this theme. The index will be reconstituted on a half yearly basis and would be
rebalanced on a quarterly basis. This index is likely to be a useful benchmark for index funds and ETFs
benchmarked. The base would include the complete EV ecosystem from end-to-end.

TELECOM:

 The one sector that FPIs found attractive in recent months was telecom sector. Apart from the Vodafone FPO,
which saw record FPI interest, other stocks that have seen a lot of interest in the secondary markets are Bharti
Airtel and Indus Towers. Bharti Airtel with its above average ARPU levels has been on the radar of FPIs for quite
some time. Also, tariff hikes are expected again after the elections are over in June. Indus Towers will benefit from
the 4G and 5G rollouts, as also the growing financial stability of Vodafone Idea; being a key creditor.

FMCG:

 The FMCG companies in India are moving rapidly on building up their rural volumes. For the first time in the last
five quarters, the volume growth in rural India outpaced the volume growth in urban India during the March 2024
quarter. Many of the FMCG companies have launched special packs of smaller sizes for the rural markets and that
appears to have hit off. The only concern is that such pack splitting is leading to an impact on the EBITDA margins,
so for most of the FMCG companies, it will about a delicate balance, as they market share and profitability.

OIL & GAS:

 Indian exports of refined petroleum products fell by 11% to just 1.21 million barrels per day (bpd) in the month of
April 2024. This can be attributed to robust domestic demand and tepid margins on exports of these petro
products. The exports to Asia fell by 25% while the exports to Europe fell by 3.4% in the month of April 2024.
Indian exports of diesel fell by 13% in April while the gasoline exports fell by 17% in the same period. The other
reason is supplies from the US and OPEC were ample, reducing India demand.

SECTORIAL SNAP SHOT

Majority of the sectors participated in the market rally taking it to a new all-time high. Realty, auto and metal stocks
continued to flourish as the sectors gained 4-5 per cent each during the month of May. Banks, FMCG and Pharma
were a few sectors which witnessed profit booking from higher levels and shed off some gains closing relatively flat.
IT however, was one sector that continued to face the hammering from sellers closing with a monthly fall of around
1.6% in spite of an initial rise.

INSTITUTIONAL ACTIVITY:

 May month, FIIs were bearish in the cash market with a selling of Rs 42,214.83 Cr compare to last month they
were sellers of Rs 35,692.19 Cr. and, Domestic Institutional Investors were buyers for May month as they buy
worth Rs 55,733.04 Cr as compare to previous month they were buyers of 44,186.28 cr.

3
Monthly Overview

Nifty Outlook for the Month of June 2024

The May series was positive as the index reached our target at 23100 and closed flat. The index remained
flat month on month, closing at 22,530.70, a decrease of -0.33%.

On the daily chart as of 4th June, the index reacted to the election outcome and saw a high and low at
23,179 to 21281 levels. This was followed by a rise in India Vix, which tested the highs at 31.71. The weekly
charts suggest profit booking and distribution at higher levels, indicating a cap near the 23300 – 23500
mark. Ahead of the final union budget, the prediction of a good monsoon is likely to keep the market mood
positive. From a technical standpoint, we expect the index to trade within the 21500 – 23500 range with a
buy on decline strategy. Any follow-through selling or further weakness will be followed only if the index
breaks below 21000 marks on the closing basis, which looks unlikely. The bias remains positive with
positional long bets.

Following is the list of SIP stocks to be bought in a staggered manner. Stocks are: Indusind bank, ICICI Bank,
Axis Bank, TVS motor, Tata Power, DLF, Lodha, TCS, TechM, Bharti Artel, Guj Gas, Hindalco and Hind copper.

Nifty Outlook Nifty Technical Data

Short Term Positive Monthly Closing 22,604.85
Monthly High 22,783.35
Medium Term Positive Monthly Low 21,777.65
Monthly Bias: Positive
Long Term Positive Support Level: 21,700 20,400
Resistance Level: 23,500 24,800
Moving Averages
50 DSMA 22,268
200 DSMA 20,750
200 WEEK MOVING AVG. 17,122

4
Monthly Overview

Bank Nifty Outlook for the Month of June 2024

In May 2024, the Bank Nifty traded with low activity and formed a "Doji" pattern at the close. The index was
down by -0.84% at 48,983.95 levels.

After the May expiry, the Bank Nifty gained strength and traded above a 48000 levels. Following a positive
outcome of the exit poll, the index reached levels of 51,133.20 on 3rd June. However, recent price action
indicates distribution and a temporary top in place according to the weekly charts.

The technical oscillator, RSI, suggests potential profit booking, leading to a cautious view as the index may
test a lower demand zone of 46000 marks. Despite the current declines, the overall trend of the Bank Nifty
is positive, therefore, the declines could be seen as an opportunity to add long trades. The expected range
for the index is between 46000 – 50000 levels. PSU banks such as SBIN, Canara Bank, Bank of Baroda,
Union Bank of India, and City Union Bank, followed by ICICI Bank, Axis Bank and Indusind Bank can be
viewed as adding on correction.

Bank Nifty Outlook Bank Nifty Technical Data

Short Term Positive Monthly Closing 49,396.75
Monthly High 49,974.75
Medium Term Positive
Monthly Low 46,579.05
Long Term Positive Monthly Bias: Positive
Support Level: 46,000 44,500
Banking Sector Performer Resistance Level: 51,300 54,000
PNB Moving Averages
Top Outperformer
AXISBANK 50 DSMA 47,392
200 DSMA 45,786
KOTAKBANK 200 WEEK MOVING AVG.
Top Underperformer 37,904
INDUSINDBANK

5
Monthly Overview

Head Technical & Derivatives

Brijesh Ail [email protected]

Research Analyst
Kshitija Salvi [email protected]
Shantanu Vartak [email protected]

IDBI Capital Markets & Securities Ltd. (A wholly owned subsidiary of IDBI Bank Ltd.)
Retail Research Desk
Regd. Office: 6th Floor, IDBI Tower, WTC Complex, Cuffe Parade, Colaba, Mumbai – 400 005. Phones: (91-22) 2217 1700; Fax: (91-22) 2285 0785; Email:
[email protected]
SEBI Registration: BSE & NSE (Cash & FO) – INZ000007237, NSDL – IN-DP-NSDL-12-96, Research – INH000002459, CIN – U65990MH1993GOI075578
Compliance Officer: Ms. Pushkar Vartak; Email: [email protected]; Telephone: (91-22) 4069 1700

Disclaimer

This report has been published by IDBI Capital Markets & Securities Ltd. (hereinafter referred to as “IDBI Capital”) for private circulation. This report should not be
reproduced or copied or made available to others. No person associated with IDBI Capital is obligated to call or initiate contact with you for the purposes of elaborating
or following up on the information contained in this report. The information contained herein is strictly confidential and meant for solely for the selected recipient and
may not be altered in any way, transmitted to copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without the
prior written consent of IDBI Capital. Recipients may not receive this report at the same time as other recipients. IDBI Capital will not treat recipients as customers by
virtue of their receiving this report.
The information contained herein is from the public domain or sources believed to be reliable, but we do not make any representation or warranty that it is accurate,
complete or up-to-date and it should not be relied upon as such. While reasonable care has been taken to ensure that information given is at the time believed to be fair
and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and
it should not be relied upon as such. In so far as this report includes current or historical information, it is believed to be reliable, although its accuracy and
completeness cannot be guaranteed.
Opinions expressed are current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis, the information discussed
in this material, IDBI Capital, its directors, employees are under no obligation to update or keep the information current. Further there may be regulatory, compliance, or
other reasons that prevent us from doing so.
Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
IDBI Capital, its directors and employees and any person connected with it, will not in any way be responsible for the contents of this report or for any losses, costs,
expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the
report.
This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any
investment/tax advice.
This report is for information only and has not been prepared based on specific investment objectives. The securities discussed in this report may not be suitable for all
investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis.
Trading in stocks, stock derivatives, and other securities is inherently risky and the recipient agrees to assume complete and full responsibility for the outcomes of all
trading decisions that the recipient makes, including but not limited to loss of capital.
Opinions, projections and estimates in this report solely constitute the current judgment of the author of this report as of the date of this report and do not in any way
reflect the views of IDBI Capital, its directors, officers, or employees.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other
jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IDBI Capital and associates to any
registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain
category of investors. Persons in whose possession this report may come are required to inform themselves of and to observe such restriction.
E-mail is not a secure method of communication. IDBI Capital cannot accept responsibility for the accuracy or completeness of any e-mail message or any
attachment(s).
This transmission could contain viruses, be corrupted, destroyed, in complete, intercepted, lost or arrived late. IDBI Capital, its directors or employees or associates
accept no liability for any damage caused, directly or indirectly, by this email.

6
Monthly Overview

Analyst Disclosures

We, hereby certify that the views expressed in this report accurately reflect my personal views about the subject companies and / or securities. I also certify that no
part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. Principally, I will be
responsible for the preparation of this research report and have taken reasonable care to achieve and maintain independence and objectivity in making any
recommendations herein.

Other Disclosure
IDBI Capital Markets & Securities Ltd. (hereinafter referred to as “IDBI Capital”) was incorporated in the year 1993 under Companies Act, 1956 and is a wholly
owned subsidiary of IDBI Bank Limited. IDBI Capital is one of India’s leading securities firm which offers a full suite of products and services to individual,
institutional and corporate clients namely Stock broking (Institutional and Retail) , Distribution of financial products, Merchant Banking, Corporate Advisory
Services, Debt Arranging & Underwriting, Portfolio Manager Services and providing Depository Services. IDBI Capital is a registered trading and clearing member of
BSE Ltd. (BSE) and National Stock Exchange of India Limited (NSE). IDBI Capital is also a SEBI registered Merchant Banker, Portfolio Manager and Research Analyst.
IDBI Capital is also a SEBI registered depository participant with National Securities Depository Limited (NSDL) and is also a Mutual Fund Advisor registered with
Association of Mutual Funds in India (AMFI).
IDBI Capital and its associates IDBI Bank Ltd. (Holding Company), IDBI Intech Ltd. (Fellow Subsidiary), IDBI Asset Management Ltd. (Fellow Subsidiary) and IDBI
Trusteeship Services Ltd. (Fellow Subsidiary).
IDBI Group is a full-serviced banking, integrated investment banking, investment management, brokerage and financing group. Details in respect of which are
available on www.idbicapital.com IDBI Capital along with its associates are leading underwriter of securities and participants in virtually all securities trading
markets in India. We and our associates have investment banking and other business relationships with a significant percentage of the companies covered by our
Research Department. Investors should assume that IDBI Capital and/or its associates are seeking or will seek investment banking or other business from the
company or companies that are the subject of this material. IDBI Capital generally prohibits its analysts, persons reporting to analysts, and their dependent family
members having a financial conflict of interest in the securities or derivatives of any companies that the analysts cover. Additionally, IDBI Capital generally prohibits
its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our sales
people, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary
to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the
recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or
potential conflicts of interest. Directors of IDBI Capital or its associates may have interest in the Companies under recommendation in this report either as Director
or shareholder. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is
provided herein. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or
solicitation would be illegal. We are not soliciting any action based on this material. It is for the general information of clients of IDBI Capital. It does not constitute a
personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice
or recommendation in this material, clients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The
price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any
investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. We and our
associates, officers, directors, and employees, including persons involved in the preparation or issuance of this material, may from time to time have “long” or
“short” positions in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. For the purpose of calculating whether
IDBI Capital and its associates holds beneficially owns or controls, including the right to vote for directors, 1% of more of the equity shares of the subject issuer of a
research report, the holdings does not include accounts managed by IDBI Asset Management Company/ IDBI Mutual Fund.
IDBI Capital hereby declares that our activities were neither suspended nor we have materially defaulted with any Stock Exchange authority with whom we are
registered in last five years. However SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advice
letters or levied minor penalty on IDBI Capital for certain operational deviations. We have not been debarred from doing business by any Stock Exchange / SEBI or
any other authorities; nor has our certificate of registration been cancelled by SEBI at any point of time. IDBI Capital, its directors or employees or associates, may
from time to time, have positions in, or options on, and buy and sell securities referred to herein. IDBI Capital or its associates, during the normal course of business,
from time to time, may solicit from or perform investment banking or other services for any company mentioned in this document or their connected persons or be
engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or their affiliate companies or act as advisor or lender / borrower to such company(ies)/associates companies or have other potential
conflict of interest. This report may provide hyperlinks to other websites. Except to the extent to which the report refers to the website of IDBI Capital, IDBI Capital
states that it has not reviewed the linked site and takes no responsibility for the content contained in such other websites. Accessing such websites shall be at
recipient's own risk. IDBI Capital encourages the practice of giving independent opinion in research report preparation by the analyst and thus strives to minimize
the conflict in preparation of research report. Accordingly, neither IDBI Capital nor Research Analysts have any material conflict of interest at the time of publication
of this report. We offer our research services to primarily institutional investors and their employees, directors, fund managers, advisors who are registered with us.
The Research Analyst has not served as an officer, director or employee of Subject Company. We or our associates may have received compensation from the
subject company in the past 12 months. We or our associates may have managed or co-managed public offering of securities for the subject company in the past 12
months. We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company in the
past 12 months. We or our associates may have received any compensation for products or services other than investment banking or merchant banking or
brokerage services from the subject company in the past 12 months. We or our associates may have received any compensation or other benefits from the Subject
Company or third party in connection with the research report. Research Analyst or his/her relative’s may have financial interest in the subject company. IDBI
Capital or its associates may have financial interest in the subject company. Research Analyst or his/her relatives does not have actual/beneficial ownership of 1%
or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report. IDBI Capital or its associates
may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of
Research Report. The Subject Company may have been a client during twelve months preceding the date of distribution of the research report. Price history of the
daily closing price of the securities covered in this note is available at www.bseindia.com; www.nseindia.com and
www.economictimes.indiatimes.com/markets/stocks/stock-quotes.