Weekly Market Newsletter 3 – June 22 - June 29, 2025

Macro Summary

The week was dominated by escalating geopolitical tensions in West Asia, with US airstrikes on Iranian nuclear sites and subsequent Iranian threats to close the Strait of Hormuz. This led to airspace diversions and heightened alerts, causing initial market uncertainty. However, a rapid de-escalation, reportedly brokered by President Trump, resulted in a ceasefire and a significant drop in Brent crude oil prices (down 4.5%). Simultaneously, positive developments on the trade front emerged, with the US finalizing a trade agreement with China, and US officials confirming an interim trade deal with India is nearing completion. Domestically, monsoon rains covered India ahead of schedule, while FII/DII activity data trends are available from external sources. US Q1 GDP came in negative at -0.5%, with jobless claims slightly better than estimates, leading to discussions around potential interest rate adjustments.

Highlights of the Week

• US-Iran conflict escalated with airstrikes on nuclear sites and missile launches, followed by a swift ceasefire agreement.

• Oil prices declined sharply following the de-escalation in West Asia, easing commodity-driven inflation fears.

• Godrej Properties recorded over ₹2,000 Cr in home sales at a new Bengaluru project, signaling strong real estate demand.

• Indian Defence sector garnered significant orders, with Solar Industries securing a ₹450 Cr order from the Indian Army, alongside other major wins for Zen Tech and IdeaForge.

• The US finalized a trade deal with China, and an interim trade agreement with India is reported to be nearing completion.

• Infrastructure and Renewable Energy sectors saw substantial new project wins and order inflows for companies like ITD Cementation, KNR Construction, and BHEL.

• Biocon is in focus due to a potential merger of its biosimilars arm and recent Health Canada approval for Yesafili.

• Indusind Bank faced scrutiny over its microfinance loan portfolio, with reports suggesting potential Nifty50 exclusion.

Sector Heat-Map

Sector	Key Prints	Momentum
Defence & Aerospace	Large orders for loitering munitions, UAVs; strategic acquisitions; NADCAP accreditation.	Bullish
Real Estate	Record sales at new launches; significant land acquisitions; RERA approvals.	Bullish
Energy (Renewables/Power)	Large BESS projects; EPC orders; solar line commissioning; PPA signings.	Bullish
Infrastructure & Capital Goods	Major L1 bids and project wins (Metro, EPC, Roads); strong order book guidance.	Bullish
Logistics & Shipping	Freight rate increases (30-40%); Middle East diversions; EV fleet deployment.	Neutral to Bullish
Pharma & Healthcare	US FDA approvals; facility inspection clearances; biosimilar merger talks.	Bullish
Automobiles & Ancillaries	New model launches; EV fleet adoption; US tariff concerns; M&A; potential govt scheme for OEMs.	Neutral to Mixed
Banking & Financial Services	Fundraising via NCDs; co-lending agreements; stock broker licenses; MFI loan scrutiny for some.	Neutral to Bullish
IT & Technology	Q1 deal signing slowdown; buybacks; strategic collaborations; aerospace entry.	Neutral

Key Sector Narratives

Defence Sector Boom: Geopolitical instability, particularly the US-Iran conflict, has underscored the importance of defence preparedness. This directly translates into increased domestic orders and strategic initiatives for Indian defence manufacturers. Companies involved in munitions, UAVs, and military training systems are seeing a significant uptick in their order books, driven by government emphasis on self-reliance and modernization. The sector is poised for continued growth as nations prioritize national security.

Real Estate Resilience: Despite broader economic concerns, the Indian real estate sector continues to demonstrate robust demand. New project launches, especially in major urban centers like Bengaluru and Gurugram, are reporting strong sales numbers, with developers actively acquiring land parcels for future developments. This consistent traction, coupled with increasing GDV (Gross Development Value) for new projects, indicates sustained buyer confidence and a healthy pipeline for real estate companies.

Renewables & Infrastructure Push: The government's accelerated focus on green energy and infrastructure development is translating into substantial order inflows. This includes large-scale Battery Energy Storage System (BESS) projects, solar EPC contracts, and major infrastructure bids in roads, metro, and power transmission. Companies in these segments are benefiting from long-term policy support and significant capital expenditure plans, ensuring sustained growth in their order books and revenue visibility.

Bullish Set-ups (↑)

Stock	Catalyst	Comment
Godrej Properties	Sells homes worth over ₹2,000 Cr at Bengaluru project launch.	Exceptional sales response indicating strong demand and brand value.
Zen Technologies	Acquires majority stake in TISA Aerospace; secures patent for military training systems.	Strategic expansion into high-growth defence segments like loitering munitions and UAVs, bolstered by innovation.
Solar Industries	Defence arm gets ₹450 Cr Nagastra-1R loitering munitions order from Indian Army; additional ₹160 Cr order.	Significant defence orders strengthen order book and revenue visibility.
IdeaForge Tech	Wins order worth ₹137 Cr.	Order adds approximately 80% to annual revenue, showing strong growth potential.
ITD Cementation	Lowest bidder in jobs worth ₹1,500 Cr; secures $67.4M international marine contract.	Building a robust order book with both domestic and international wins, targeting ₹15,000 Cr inflow this year.
NLC India	Unit secures LOA for three standalone BESS projects (250 MW/500 MWh).	Significant entry into Battery Energy Storage Systems, aligning with green energy push.
Biocon	Company looking to merge Biocon Biosimilars with Biocon; receives Health Canada approval for Yesafili (Aflibercept).	Streamlining corporate structure and achieving key global market approvals for biosimilars.
Indigo	Air India to reduce domestic capacity by approximately 5% temporarily.	Potential market share gain and improved load factors due to competitor capacity reduction.
Signature Global	Acquires 9.96 acres in Sohna, Gurugram (0.53 Mn sq ft sales potential); to invest ₹2,200 Cr in new housing project.	Aggressive expansion and investment in high-growth residential segments.
KNR Construction	JV wins contract worth ₹4,800 Cr for 5 years, company's share 74%.	Massive order win significantly boosts order book and annual revenue expectations.
BHEL	Gets LOA from Adani Power for six 800 MW thermal units worth ₹65B.	One of the largest orders, indicating a revival in power sector capex and BHEL's pivotal role.
Amber Enterprises	Subsidiary ILJIN Electronics to acquire majority stake in Power-One Micro Systems.	Strategic entry into energy solutions, including solar inverters, BESS, UPS, and EV chargers.
Lupin	Receives US FDA approval for Prucalopride Tablets, with US sales of $184M.	New drug approval opens significant market opportunity in the US.
Scoda Tubes	Plans to expand seamless capacity by 99% and welded capacity by 11X by FY26.	Aggressive capacity expansion to meet growing demand, signaling strong future revenue growth.

Bearish Set-ups (↓)

Stock	Catalyst	Comment
Indusind Bank	MFI, unsecured loans under scanner (₹6,000-7,000 Cr); potential exclusion from Nifty50.	Ongoing probe raises concerns about asset quality and lending practices, leading to potential index exclusion.
Seamec	Off-hired by ONGC.	Loss of a key contract will negatively impact revenue and utilization.
Tata Technologies	Q1 deal signing slower than expected due to tariff uncertainty.	Soft start to the quarter could impact revenue guidance and overall growth.
Dixon Technologies	Largest client Motorola started outsourcing domestic volumes to Karbonn.	Loss of business from a major client will impact manufacturing volumes and profitability.
Zydus Life	US to stop funding Global Vaccine Alliance GAVI.	Potential impact on demand or pricing for vaccines/pharmaceuticals tied to global health initiatives.
ICICI Lombard / Insurance Sector	IRDAI finds big lapses in health claims process inspections.	Regulatory scrutiny could lead to penalties, stricter compliance, and impact on profitability/growth for health insurance players.
Kalpataru Projects International	NHAI issues termination notice to unit WEPL claiming ₹3.51B.	Significant financial claim and project termination could impact company's financials and reputation.

Earnings / Corporate Actions Calendar

• July 19: HDFC Bank Q1 Results.

• June 26: Muthoot Capital Services Board Meeting for NCD Issuance.

• June 27: LKP Finance Board Meeting for Fundraising Options.

• June 28: AU Small Finance Bank to consider Annual Fundraising Plan; Deccan Bearings Board Meeting for Preferential Allotment.

• June 30: Federal Bank Board Meeting to consider Fundraising Plans; Investment & Precision Castings Board Meeting for Bonus Issue; Rashtriya Chemicals and Fertilizers to consider NCDs Aggregating to ₹3B.

• July 4: VRL Logistics Board Meeting to consider Bonus Shares.

• July 11: NSE to begin Electricity Futures Trading.

• August 21: HAL Dividend Record Date (Final Dividend of ₹15 per share).

• Ongoing: Kaynes Tech QIP Issue; CEAT NCD Issuance and Subsidiary Funding; Can Fin Homes Debt and Share Issuance; BSE likely Inclusion in Nifty100; Adani Enterprises Draft Prospectus for ₹1,000 Cr NCD Public Issue.

• August 29: NSE to exclude F&O contracts on Adani Total Gas, Jindal Stainless, and six other securities.

The Editor’s Note

The week showcased extreme market sensitivity to geopolitical events, with the swift de-escalation of the US-Iran conflict highlighting the fragility and potential for rapid shifts in sentiment. This dynamic environment necessitates a vigilant and adaptive tactical stance. While the ceasefire has reduced immediate oil price pressure, underlying tensions remain a risk. Investors should prioritize companies with robust domestic growth drivers, strong order books, and those benefiting from government policy thrusts in sectors like defence, infrastructure, and renewables. Caution is advised for entities facing regulatory headwinds or significant international exposure given continued global uncertainties.

Final Watch-list

• Long Bias (↑): Godrej Properties: Sustained strong sales momentum; Zen Technologies: Expanding into high-growth defence segments; Solar Industries: Significant defence order inflows; IdeaForge Tech: Large order boosting annual revenue; ITD Cementation: Robust order book and L1 status; Biocon: Corporate restructuring & global biosimilar approvals; Indigo: Benefiting from competitor capacity cuts; Signature Global: Aggressive land acquisition and project launches; KNR Construction: Major contract win boosting order book; BHEL: Securing large thermal power plant orders; Amber Enterprises: Strategic entry into new energy solutions; Lupin: Key US FDA approval for Prucalopride Tablets; Scoda Tubes: Significant capacity expansion plans.

• Short Bias (↓): Indusind Bank: Regulatory scrutiny on loan portfolio; Seamec: Impact from ONGC contract off-hire; Tata Technologies: Slower deal signing due to tariff uncertainty; Dixon Technologies: Loss of volumes from key client; Zydus Life: Impact from change in US funding for GAVI; ICICI Lombard: Facing IRDAI scrutiny on health claims; Kalpataru Projects International: Unit facing significant contract termination claim.

© 2025 MarketsNewsletterGPT • For educational use only

Additional Information

No additional information available for this week's newsletter. Please refer to the previous sections for comprehensive market insights.