Smartworks IPO listing gain, Adani sells stake in AWL, & more — Daily Digest
Thursday, 17 July 2025
Markets opened slightly above yesterday’s closing point.
Nifty 50 fell in the second half of the day and closed in the red.
Realty stocks and metal stocks rose the most today. IT stocks and PSU bank stocks fell the most.
Global markets: US, European, and most Asian markets closed in green.
News
Smartworks Coworking IPO got listed on the stock exchanges at a 6.88% premium over its issue price and closed 9.35% up.
Euro Area’s inflation rose to 2% year-on-year in June (vs 1.9% in May). Core inflation stayed constant at 2.3%.
Japan’s exports declined 0.5% year-on-year in June (vs a fall of 1.7% in May), while imports rose 0.2% (vs a fall of 7.7% in May).
SEBI proposed to standardize the valuation of gold and silver ETFs by using domestic commodity exchange benchmark prices instead of international benchmarks like the LBMA (London Bullion Market Association).
Stocks Updates
Adani Enterprises: sold a 20% stake in AWL Agri Business (formerly Adani Wilmar) to Singapore-based Wilmar International for around Rs 7,150 crore. Wilmar is now the majority owner with around 64% stake.
Axis Bank: net profit fell 3.4% year-on-year to Rs 6,243.72 crore in the April-June quarter. Net interest income grew 1.5% to Rs 14,106.62 crore.
Wipro: net profit rose 11% year-on-year to Rs 3,330 crore in the April-June quarter. Dividend declared: Rs 5 per share. Record date: 28 July.
Jio Financial: net profit rose 3.8% year-on-year to Rs 324.66 crore in the April-June quarter.
LTIMindtree: net profit rose 10.6% year-on-year to Rs 1,254 crore in the April-June quarter.
HDFC AMC: net profit rose 24% year-on-year to Rs 748 crore in the April-June quarter.
Indian Hotels: net profit rose 19.3% year-on-year to Rs 296 crore in the April-June quarter.
Polycab: net profit rose 49.5% year-on-year to Rs 592 crore in the April-June quarter.
Dixon Tech: will transfer its lighting business and subsidiary DTSPL to a 50:50 joint venture ‘Lightanium Technologies’ with Signify Innovations in exchange for equity in the JV.
JSW Energy: the Supreme Court ruled in favor of Himachal Pradesh, restoring the state's right to receive 18% free electricity from JSW Hydro (a company subsidiary), reversing an earlier High Court order that capped it at 13%.
Word of the Day
Hurdle Rate
It is the minimum rate of return needed to make a project worth investing
It is like a benchmark — the return should cross the benchmark before the investment is approved. If it falls short, the investment is not approved.
Investors use hurdle rate to determine if an investment is worth the risk.
Example: a company is thinking of starting a new project. It has a hurdle rate of 10% but the project’s expected return is 8%.
Therefore, it is likely that the company will reject the project as the return is less than the hurdle rate.
6 Day Course
Theme: understanding MF returns
Day 4: Thursday
So far, we discussed how mutual funds’ short term returns can vary — making them look less good. But in the longer run, their returns end up being similar.
Does this mean all mutual funds’ returns are similar?
No.
Most good mutual funds’ returns are similar. They also tend to move in tandem.
But there are clear poor-performing mutual funds too. It’s just that we cannot judge mutual funds based on their short term returns.
If a mutual fund’s long term returns are poor compared to other mutual funds in the same category and subcategory, we can say with certainty that that mutual fund is not good.
Poorly managed mutual funds tend to end up performing poorly not because of one bad investment but repeated poor decisions.
Featured Question
Q. “How do we actually know if the company is undervalued or overvalued and what could be the fair price?”
There is no exact way of determining this.
This is always going to be an art.
Some valuations are clearly too high. Some are clearly too low.
Example:
Everyone knows Rs 10 per kg is a cheap price for buying mangoes. Everyone also knows Rs 20,000 per kg is too high a price for mangoes. But what about Rs 100 per kg? Some people will find it cheap, some will find it fairly priced, some may think it is overpriced.
Likewise, when you are buying a share, you want to pay a low price for it.
You cannot look at a company’s present revenues, profits, and margins to make a comment on its valuation.
We need to look at its future potential.
Why?
Because many more investors are comfortable paying a higher price for a share whose future holds great growth and profits.
So, many good stocks are considered fairly valued even if their current share price is too high considering its current revenues and profits.
So the next question to ask is, how to determine the future value?
This is where nobody can say anything with certainty.
Nobody knows what the future will be like. We can only make informed guesses.
Yes, looking at PE ratio and PEG ratio is one of the easiest ways to determine if a stock is overvalued or not.
But that’s also a lazy way to do so.
If these ratios are the only metrics that investors use, they might end up missing some of the best multi-bagger stocks.
At the same time, if they completely ignore the PE ratio and PEG ratio, they might end up investing in extremely overvalued companies — resulting in no return-on-investment.
Example:
A mining company’s revenues and profits are increasing consistently at around 10% year-on-year.
Its PE ratio is 30.
This might be considered over-valued by some investors.
On the other hand, a tech company is expanding rapidly while not seeing a great increase in costs. Its revenues and profits are growing at 40% year-on-year.
Its PE ratio is 50.
This might be considered fairly valued by some investors.
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