Weekly Update on the Stock Market: TCS results Q2, Does Ola Electric’s growing problems?, and the SENSEX and NIFTY decline

Weekly Update on the Stock Market: TCS results Q2, Ola Electric’s growing problems, and the SENSEX and NIFTY decline

Second-quarter earnings have begun, so stock-specific activity based on company results and management commentary is probably in store for the upcoming week. The wholesale inflation figures that would be released during the course of the week would also be monitored by investors.

Weekly recap 7-11 Oct 2024.

Ola Electric Mobility had a weekly decline of around 9% due to customer complaints about service.
Repo rate-sensitive equities continue to be watched closely as the RBI’s shift to a “neutral” position raises the prospect of a rate drop in December.
Investors are still wary due to TCS’s lacklustre Q2 earnings.

Hi there, readers! Once more, it’s that time of week. We’re back with another weekly recap of what’s going on in the stock market.
This week was unique for the benchmark NIFTY and SENSEX because, in recent days, the attention has shifted from the movement of wider indexes to the mood on Wall Street.
For the second week in a row, the overall indexes fell, albeit the drop was not very big. The indexes concluded marginally down after erratic trading throughout the week, as days of gains and losses alternated.

Weekly, the BSE SENSEX finished 0.4%, or 307 points, down at 81,381.36, while the NIFTY50 index fell 0.2%, or around 50 points, to close at 24,964.25.

Nonetheless, this week’s attitude on the D-Street was mostly shaped by a few significant events pertaining to the business, industry, and a few particular organizations. This week’s domestic market activity was also hampered by the conflicting prognosis for the US Fed rate drop following the release of the nation’s core consumer price index data, worries about Q2 profits, and ongoing geopolitical tensions.

The mishap with Ola Electric

The Bhavish Aggarwal-led Ola Electric Mobility’s stock dropped around 9% in a single week, bringing the monthly loss to more than 20%. The negative response the business received on social media as a result of unanswered customer complaints served as the catalyst for the drastic change.

The company was given a show cause notice by the nation’s consumer rights watchdog, the Central Consumer Protection Authority (CCPA), to address more than 10,600 unresolved consumer complaints filed against it between September 1, 2023, and August 30, 2024, amid growing complaints of subpar aftersales services and a significant backlog at its service centers.

These grievances included things like shoddy repairs, misrepresented products in ads, abusive trading tactics, and even the sale of used goods.

The Union Ministry of Heavy Industries’ directive to examine Ola Electric’s service centers dealt yet another blow.

Ola Electric is negatively impacted greatly by the latest events as they cast doubt on the company’s eligibility for subsidies under the government’s PM Electric Drive Vehicle (E-DRIVE) and Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) programs.

The company’s revenues, which have already suffered over the last few months, may be negatively impacted by the announcement. Ola Electric recorded its lowest monthly sales results in the previous 11 months in September, selling 23,965 units, an 11% month-over-month (MoM) fall. In the e-scooter market, it lost market share as well, falling from a high of 49% in the first quarter of FY25 to 27% in September.

The demise of Ratan Tata

The nation and the markets were both shocked by the death of seasoned businessman and Tata Group chairman emeritus Mr. Ratan Tata. Tata Group stocks managed to hold their ground in spite of the significant loss because investors supported the group companies out of respect for the ideals and work environment that the renowned entrepreneur promoted.

On Thursday, October 10, there was a lot of purchasing activity in the stocks of Tata Group firms. A few equities had significant intraday gains, including 15% for Tata Investment Corporation, 9% for Tata Teleservices (Maharashtra), and 9% for Tata Chemicals.

The RBI’s shift in position

The 51st meeting of the Reserve Bank of India (RBI), chaired by Governor Shaktikanta Das, was another event that was regarded as a key step for India’s economic policy even if it did not result in much movement in larger indexes.

For the eleventh time in a row, the RBI maintained its benchmark policy repo rate at 6.5%, but it shifted from “withdrawal of accommodation” to “neutral.”

Experts think that a rate decrease may occur sooner than anticipated because the policy attitude shift occurred far earlier than the market anticipated. Following the RBI’s decision, shares of rate-sensitive industries including banking and finance, auto, and real estate gradually increased, but there was no significant improvement throughout the course of the week.

TCS profits

Though on a somber note, IT heavyweight Tata Consultancy Services Ltd (TCS) opened the September quarter results season. During Q2 FY25, the company’s net profit increased by a less than anticipated 5% year over year to ₹11,909 crore. Operational revenue increased 8% year over year to ₹64,259 crore.

Experts in the market are worried that India Inc. may have its worst quarterly performance since June 2020 during the September quarter results season. According to some predictions, NIFTY profits in the September quarter would climb year over year by just 2%, which would be the lowest growth in the previous 17 quarters.

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Disclaimer: The above article is for educational Weekly Update on the Stock Market: TCS results for Q2 exceeded expectations, showcasing the company’s strong performance. As for Ola Electric, the company has been facing growing problems recently. Furthermore, both the SENSEX and NIFTY experienced a decline in the past week. **Disclaimer: The above article is for educational and news purposes, this is not a buying or selling recommendation. TraderPulse recommends that users check with certified experts before making any investment decisions.** and news purposes, this is not a buying or selling recommendation. TraderPulse recommends that users to check with certified experts before making any investment decisions.