Laurus Labs Tumbles 10%
- 27th January 2025
Aaj Ka Bazaar
The weakness that emerged on Wall Street on Friday may have reflected concerns about the outlook for interest rates ahead of the Federal Reserve’s monetary policy meeting next week. While the Fed is almost universally expected to leave interest rates unchanged, traders will likely pay close attention to the accompanying statement for clues about the rate outlook. Asian markets traded mixed this morning, giving up some early gains after disappointing Chinese industrial profits and manufacturing and non-manufacturing data were released. Indian market looks set to open a tad lower on Monday after declining for three straight weeks in a row. A cautious undertone may prevail due to continued foreign fund flows, tariff uncertainties and concerns over slowing corporate earnings growth. The next batch of Q3 earnings, expectations surrounding the upcoming Budget, the monthly F&O expiry and caution ahead of the US Federal Reserve’s interest-rate decision may sway markets as the week progresses.
Markets Around Us
BSE Sensex –75,700.43 (-0.64%)
Nifty 50 – 22,940.15 (-0.66%)
Bank Nifty – 47,881.65 (-1.01%)
Dow Jones – 44,287.47 (-0.29%)
Nasdaq – 19,956.29 (-0.49%)
FTSE – 8,502.35 (-0.74%)
Nikkei 225 – 39,824.96 (-0.29%)
Hang Seng – 20,266.42 (1.08%)
Sector: Pharmaceuticals
Laurus Labs Falls 10% Post Earnings
Laurus Labs shares dropped 10% as investors booked profits after a two-day rally fueled by strong Q3 results. The company reported a net profit of ₹92 crore, a sharp rise from ₹23 crore in the same quarter last year, supported by a significant increase in other income. Revenue grew 18.5% year-on-year to ₹1,415 crore, with a sequential increase of 16%. Notably, the EBITDA margin improved by 500 basis points to 20.2%, the highest since Q4 FY23, driven by better gross margins and operating leverage. While Laurus expects further margin improvements through asset utilization and productivity gains, Goldman Sachs maintained a ‘sell’ rating with a target price of ₹475, citing the need for sustained financial improvement. The management remains optimistic about medium-term growth, with a focus on maintaining 20% EBITDA margins for FY25.
Why it Matters:
Laurus Labs’ strong Q3 results highlight a sharp recovery in profitability and operating efficiency, with EBITDA margins crossing 20% after several quarters. However, the stock’s sharp drop reflects profit booking, signaling cautious sentiment among investors. The company’s medium-term growth plans and margin guidance make it a key stock to watch.
NIFTY 50 GAINERS
BRITANNIA – 5129.95 (0.56%)
SHRIRAMFIN – 529.35 (0.36%)
DRREDDY – 1255.00 (0.05%)
NIFTY 50 LOSERS
INFY – 1841.05 (-1.83%)
JSWSTEEL – 916.00 (-1.76%)
HCLTECH– 1765.25 (-1.54%)
Sector: Construction
KEC Wins ₹1,445 Cr Orders
KEC International’s share price is in focus today after securing new orders worth ₹1,445 crore for transmission and distribution (T&D) projects in India, including ± 800 kV HVDC and 400 kV transmission line orders from Power Grid Corporation of India (PGCIL). The company’s board will meet on February 3, 2025, to review its financial performance for the quarter and nine months ending December 31, 2024. Earlier this month, KEC bagged orders worth ₹1,136 crore across various segments, adding to December’s orders of ₹1,073 crore. The stock recently traded 36.4% below its 52-week high of ₹1,312 and 35.64% above its 52-week low of ₹615.15. These consistent order wins highlight KEC’s strong business momentum, making it a stock to watch for potential opportunities.
Why it Matters:
KEC International’s consistent order wins, including the ₹1,445 crore T&D projects, highlight its robust growth trajectory in the infrastructure sector. This strengthens its revenue pipeline and market position, making it an attractive opportunity for investors. Additionally, the upcoming financial results could provide insights into its performance and future prospects.
Around the World
Asian stocks fell on Monday after U.S. President Trump imposed 25% trade tariffs on Colombia, sparking fears of more tariffs on countries like Canada, Mexico, and China. Chinese markets were mixed, with gains in tech stocks like Baidu and Alibaba driven by optimism over DeepSeek R1, a new AI model. However, weaker-than-expected PMI data highlighted a slowdown in China’s economy, dampening broader market sentiment. Hong Kong’s Hang Seng index outperformed, rising 0.6%, while Japan’s Nikkei 225 fell 0.4%, and South Korea’s KOSPI stayed flat. Regional volumes were muted due to upcoming holidays, and focus remains on the Federal Reserve meeting this week, with expectations of steady interest rates.
Option Traders Corner
Max Pain
Nifty 50 – 23,350
Bank Nifty – 49,200
Nifty 50 – 23,163 (Pivot)
Support – 22,979, 22,865, 22,681
Resistance – 23,276, 23,460, 23,573
Bank Nifty – 48,476 (Pivot)
Support – 48,094, 47,820, 47,438
Resistance – 48,749, 49,132, 49,405
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