Tale of the Tape 

Hi y'all. 

Nifty (+0.2%) and Sensex (+0.3%) saw a day of muted gains. Midcaps (+0.4%) and Smallcaps (+0.6%) continued their recovery. The advance-decline ratio was in favour of the bulls (3:2).

It was a mixed-bag kinda day for sectors. Real Estate (+1.4%) was the top winner, followed by IT (+0.8%) and  Energy (+0.8%). Pharma (-1%) and Auto (-0.5%) continued to drag lower.

Maruti Suzuki has been killing it in 2025 so far! Read our top story to get the deets on its bull case in the year ahead.

HDFC AMC (+4%) had a solid Q3. Meanwhile, Shoppers Stop’s Q3 numbers were boosted by a great festive season. More details below.

Brokerage reactions. Trent (+4%) was the top Nifty gainer after Elara Capital said it sees a further +33% upside from current levels. Dixon Tech was up +4% after Emkay slapped a buy call on the stock.

Persistent Systems rallied +5% intraday after launching an AI-powered contract management solution.

IRFC (+1%) was in focus after emerging as the lowest bidder for financing the Rs 3,167-cr Banhardih coal block. 

Aditya Birla Fashion (-2%) will raise nearly Rs 5,000 cr in funding via the QIP route.

Welspun Corp (+4%) partnered with Saudi Aramco to set up line pipe manufacturing capacity in Saudi Arabia.

Here are the closing prints:

Stock
Maruti Leads The Auto Pack

Maruti Suzuki has been ZOOMING! The stock is up +11% in January so far at a time when everything else is melting down. So, WTF is going on here? Here’s what you need to know.

1) Worst is over: 2024 was awful for the auto sector. Urban consumption dropped, inventory piled up and companies were forced to hand out discounts. The good news though is that some of this has bottomed out. Maruti reported a whopping +30% YoY sales bump in Dec 2024. Its dealer inventory came down to just 9 days at the Dec-end. With discounts likely peaking in Q2FY25 and experts projecting ~8% growth in FY26, Maruti should bounce back strongly when demand fully recovers.

2) Valuations: Despite the recent rally, the stock is STILL cheap. ICYMI - in 2024, it underperformed (+5% vs Nifty Auto’s +23%). Maruti currently trades at 23x FY26 EPS, which is ~10% cheaper than industry average. Put simply, the risk-reward ratio is too good right now.

3) EVs and hatchbacks: Sales of small cars have slowed down even as EVs saw a big boom in 2023-24. Unfortunately for Maruti, it lost out on both fronts because it was the king of hatchbacks and still has no presence in electric. That said, its first EV will be launched this year, which will allow it to compete with Tata. And if customers start shifting back towards hatchbacks, Maruti will gain the most! FYI - IIFL Securities has a new target price of Rs 13,800 p/sh; +15% upside from current levels.

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