Weekly Market Newsletter – June 10-15, 2025

Macro Summary

The week was dominated by escalating geopolitical tensions in the Middle East, with Israel launching airstrikes on Iranian military and nuclear sites, followed by Iranian missile and drone retaliations. This conflict led to a significant surge in crude oil prices, rising over 8-12%, impacting global inflation concerns. US-China trade relations saw progress, with discussions extending and agreements reached on a framework for Geneva consensus, including rare earths. However, new US tariffs on Chinese goods, including steel, were announced. Domestically, the RBI signaled liquidity boosting measures by reducing CRR and repo rates, and initiated discussions to enhance bancassurance, while addressing concerns over high interest rates in the microfinance sector. India also progressed trade talks with the US, and discussions on rare earth supply chains were active. FII/DII activity remained a key factor amid global volatility.

Highlights of the Week

• Geopolitical Escalation: Israel-Iran conflict triggered a sharp rise in global crude oil and gold prices, impacting risk sentiment.

• Air India Incident: A fatal crash of an Air India Boeing 787 in Ahmedabad led to immediate safety inspections of the entire 787 fleet in India.

• Adani Group's Capex: Announced India's largest private capital expenditure plan of $100 billion over six years, signaling major investment.

• Rare Earth Dynamics: US-China talks included rare earth supply, and India's IREL was instructed to stop exports to Japan, aiming to expand domestic processing.

• RBI Liquidity Boost: Central bank reduced CRR and repo rates, alongside steps to encourage credit growth and insurance product sales by PSU banks.

• Major Order Wins: L&T, HCC, Shakti Pumps, RailTel, and NBCC secured significant contracts across infrastructure and defence.

• FDI Inflows: Maharashtra and Karnataka accounted for 51% of India's FDI in FY25, highlighting key investment hubs.

• Antidumping Duties: India imposed duties on imports of Insoluble Sulphur (China, Japan) and Vitamin-A Palmitate (China, EU, Switzerland) to support domestic industries.

Sector Heat-Map

Sector	Key Prints / Developments	Momentum
Power & Renewables	Multiple CODs (NHPC, NTPC, ACME Solar); Tata Power 4GW module production; Waaree Energies large orders; Torrent Power LOA.	Bullish
Infrastructure & Capital Goods	L&T, HCC, Shakti Pumps, RailTel, NBCC secured major contracts; Adani Group $100B capex plan.	Bullish
Financials	RBI CRR/Repo rate cuts; DFS focus on bancassurance; Jana SFB universal bank application; Motilal Oswal private credit entry; Yes Bank Moody's upgrade.	Bullish
IT Services	HCL Tech new delivery centers, AI/GenAI focus; LTTS ODC deal; Wipro ME HQ relocation; Sonata/Cyient collaborations.	Bullish
Defence	TIL Ltd SBU; Bharat Forge DRDO tech transfer; NIBE DRDO license; Adani Enterprises WOS.	Bullish
Automobiles & Auto Ancillaries	Tata Motors positive outlook; Subros AC mandate; Maruti initial EV production cut due to rare earths (later denied operational impact); Motheron supply chain fears.	Neutral to Mixed
Oil & Gas	Global crude oil prices surged (10-12%) due to Israel-Iran conflict. OMCs positive (strong auto fuel margins).	Bullish (for OMCs) / Volatile (for global prices)
Pharmaceuticals	Sun Pharma, Dr Reddy's strong growth; Zydus API facilities EIR (VAI/NAI); Sun Pharma Halol 483 (8 obs); Zydus Myrbetriq patent setback.	Neutral to Mixed

Key Sector Narratives

1. Geopolitical Impact & Supply Chain Reshaping: The escalating conflict between Israel and Iran has significantly impacted global commodity markets, particularly crude oil, which saw sharp price increases. This directly influences input costs for various industries and shifts risk sentiment. Concurrently, ongoing US-China tariff tensions are driving supply chain diversification, with Nomura noting India's potential to gain. Rare earth element availability, crucial for EVs and high-tech, remains a key concern, with discussions on export restrictions and domestic processing capacity building (e.g., IREL) gaining prominence. This narrative highlights the importance of managing geopolitical risks and supply chain resilience for industrial sectors.

2. Domestic Capital Expenditure & Infrastructure Push: A strong bullish narrative emerges from significant capital allocation announcements, most notably Adani Group's $100 billion investment plan over six years. This, coupled with multiple large contract wins by infrastructure and capital goods companies (L&T, HCC, Shakti Pumps, RailTel, NBCC), signals robust government and private sector commitment to infrastructure development. The focus on renewable energy projects, defence manufacturing, and expansion of critical industrial capacities suggests sustained order book growth and long-term revenue visibility for these sectors.

3. Financial Sector Liquidity & Regulatory Evolution: The Reserve Bank of India's proactive measures, including CRR and repo rate reductions, are aimed at boosting systemic liquidity and fostering credit growth. Simultaneously, the Department of Financial Services (DFS) is encouraging PSU banks to enhance bancassurance efforts, signaling a strategic push for insurance penetration. While these provide tailwinds, the RBI Deputy Governor's warnings about high interest rates and elevated margins in the microfinance sector indicate a watchful regulatory stance to ensure financial stability and fair practices amidst growth.

Bullish Set-ups (↑)

Stock	Catalyst	Comment
NHPC / NTPC / ACME Solar	Commercial Operation Dates (CODs) / Project Commissions	Consistent capacity additions driving revenue growth in the power and renewable energy sectors.
L&T / HCC / Shakti Pumps	Significant & Major Contract Wins / L1 Bidder Status	Strong order inflows signaling robust project pipelines and future revenue visibility in infrastructure.
Tata Motors	Positive Analyst Meet Commentary	Expectation of double-digit EBITDA margins and volume growth ahead of market, indicating strong operational performance.
SBI Life / HDFC Life	DFS focus on bancassurance / Robust premium growth	Government push for bancassurance and healthy premium growth provides tailwinds for life insurance companies.
Zydus Lifesciences	USFDA EIR for API Facilities (VAI/NAI)	Positive regulatory compliance outcomes for key manufacturing sites, ensuring production stability.
Anupam Rasayan	LOI for Electrolyte Salt Supply (30% revenue add)	Strategic entry into the high-growth lithium-ion battery chemicals market with significant revenue potential.
Dixon Technologies	JV with Signify Innovations India	Strategic partnership for OEM manufacturing of lighting products, expanding product portfolio and market reach.
Adani Group	Announces $100 Billion Capex Plan	Massive investment across its businesses will drive growth for group companies and associated sectors.
OMCs (BPCL/HPCL)	Strong Auto Fuel Margins / Refinery Closures	Favorable market conditions supporting profitability in the first quarter of FY26.
ITC	Acquires Sresta Natural Bioproducts	Expansion into the organic food segment, strengthening its FMCG portfolio.

Bearish Set-ups (↓)

Stock	Catalyst	Comment
Sun Pharma	US FDA Form 483 with 8 Observations (Halol)	Regulatory scrutiny on a key manufacturing facility may lead to compliance concerns and potential delays.
Zydus Lifesciences	US Court Rejects Myrbetriq Patent Interpretation	Setback in key drug litigation, potentially impacting future revenue from this product.
Ashok Leyland	WDFC Nearing Completion (HSBC note)	Western Dedicated Freight Corridor could lead to a 3-5% fall in MHCV volume growth, impacting demand.
Samvardhana Motherson	Partner Marelli to File Chapter 11 Bankruptcy	Potential impact on joint ventures and overall business operations due to partner's financial distress.
Optical Fibre Cable Cos (e.g., Vindhya, Universal, Birla Cables)	EU Imposes Countervailing Duty on Indian OFC	New duties could reduce competitiveness and margins in European export markets.
Ramakrishna Forging	Inventory Overstatement (FY24-25)	Financial irregularities impacting net worth and raising governance concerns.
Adani Ports	Iranian Missiles Target Haifa Port	Increased geopolitical risk for global shipping and port operations connected to conflict zones.
Nuvoco Vistas Corporation	West Bengal Revokes Incentive Schemes	Loss of significant financial incentives (₹4.27B & ₹3B) negatively impacting profitability.

Earnings / Corporate Actions Calendar

• June 14: Kellton Tech board to consider stock split and fund raising. Arman Financial Services to consider NCDs.

• June 15: RailTel Corporation board to consider final dividend.

• June 16: Affle 3i board to review investment in Talent Unlimited. Tanla Platforms to consider buyback. Zeel board meeting to discuss risk mitigation and fund raising options.

• June 18: Vedanta board meeting to consider first interim dividend.

• June 20: Jyothy Labs to meet Enam Asset Management.

• June 24: Jyothy Labs to meet YK2 Partners.

• July 23: Infosys board meeting to consider Q1 results.

• August 7: MSCI August 2025 rejig announcement (effective Aug 2025).

  
  

The Editor’s Note

The past week saw a sharp increase in global risk aversion, primarily driven by the direct military confrontation between Israel and Iran. This geopolitical instability is manifesting in volatile commodity markets, with crude oil prices surging and gold acting as a safe haven. While central banks like RBI are taking steps to inject liquidity and support credit growth, the focus remains on navigating external shocks. Investors should maintain a tactical stance, favoring domestic growth stories in sectors like infrastructure, power, and defence, which are bolstered by strong government capex and policy support. Caution is advised for companies with significant exposure to global supply chain disruptions or direct geopolitical risks. Adaptability and disciplined risk management will be paramount in the coming weeks.

Final Watch-list

• Long Bias (↑):

  • NHPC, NTPC: Consistent capacity additions and project commissioning.

  • L&T, HCC, Shakti Pumps: Robust order books and project wins in core infrastructure.

  • SBI Life, HDFC Life: Beneficiaries of regulatory push for bancassurance and strong growth.

  • Tata Motors: Positive management commentary on margins and volume growth.

  • TIL Ltd, Bharat Forge: Strong tailwinds from indigenous defence manufacturing initiatives.

  • Anupam Rasayan: Strategic entry into high-growth battery chemicals segment.

  • Dixon Technologies: Strategic JV for manufacturing expansion.

  • Adani Group companies: Potential beneficiaries of the group's massive capex plan.

  • GMDC: Focus on rare earth magnet production aligned with national strategy.

  • ITC: Expansion into organic foods and stable FMCG business.

• Short Bias (↓):

  • Sun Pharma: Regulatory concerns from recent US FDA inspection.

  • Zydus Lifesciences: Setback in key drug patent litigation.

  • Ashok Leyland: Potential negative impact from WDFC completion on MHCV volumes.

  • Samvardhana Motherson: Risk from partner's bankruptcy filing.

  • Indian Optical Fibre Cable Exporters: Facing new EU countervailing duties.

  • Ramakrishna Forging: Governance concerns due to inventory overstatement.

  • Adani Ports: Increased geopolitical risk from Middle East conflict affecting shipping.

Additional Information

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