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Informist, Tuesday, Sept. 23, 2025

By Simran Rede

MUMBAI – Analysts do not expect much movement in India's benchmark indices Wednesday as the market lacks immediate triggers for a decisive move. Investors now await development on the trade deal between India and the US as they are likely to direct the outlook for the market in the near term, analysts said.  

The Nifty 50 settled at 25169.50 points, down 32.85 points or 0.1%. The BSE Sensex ended at 82102.10 points, down 57.87 points or 0.1%. For the near term, Nifty 50 is likely to move in a range of 25100–25400 points, with the lower end acting as strong support and the upper end as key resistance, analysts said. They expect a 'buy-on-dip' strategy in the near term.

The caution in the market is expected to persist amid weakness in the rupee, outflows of foreign investments, and global policy concern, a head of research at a domestic brokerage said. The rupee ended at a record closing low against the dollar Tuesday due to weak risk sentiment following a hefty hike in the US H-1B visa fee. This prompted banks to persistently buy dollars for importers and foreign portfolio investors. Analysts cited the outflows as sustained selling by foreign portfolio investors even as dovish comments by the US Federal Reserve supported global sentiment.

The rise in tariffs on Indian goods imported in the US impacted India's private sector activity and resulted in a slower rise in new export orders over Aug-Sept. India's private sector activity expanded at a slower pace in September, compared with the previous month with the HSBC Flash Composite Purchasing Managers' Index falling to 61.9 from an over 17-year high of 63.2 in August, a data by S&P Global Tuesday showed.

Ratings agency ICRA has a positive outlook for the Indian automobile industry for the financial year 2026, projecting a 4-7% growth in the tractor segment on a strong agricultural boost and a 6-9% growth in the two-wheeler segment following an uptick due to the festival season. This positive outlook is primarily supported by above-normal monsoon rainfall, which is expected to aid agricultural production and rural incomes, creating a favourable demand environment.

Additionally, the GST rationalisation is expected to support buying sentiment among consumers. "In just the first two days, auto dealerships nationwide are witnessing unprecedented walk-ins, a surge in enquiries, and record deliveries across most segments," Shailesh Chandra, president of Society of Indian Automobile Manufacturers, said in a note.

Amid the ongoing concern over a hike in the application fee for H1-B visa, which are granted to immigrants for working in the US, information technology stocks remain in focus as they derive a major chunk of their revenue from the US. IT companies make $150,000-$170,000 of revenue per person per annum in the US and the fully-loaded salary cost per person in the US would be $110,000-$120,000 per annum, Kotak Institutional Equities said in a report.

A $100,000 one-time fee per new petition might not make commercial sense in most cases, the report said. The brokerage expects Indian IT companies would prefer to replace expiring H-1Bs with subcontractors in the near term, paying 20-25% higher wages on average and assuming no significant changes to wages on a comparable basis. "Our bear case assumes no changes in sourcing patterns and increased competition for onsite talent, leading to a 10% wage inflation, in which companies would have a 100-200 basis points margin impact and 7–14% on FY2027 earnings per share," it said. Kotak sees a negligible impact in this scenario, with a 20-30 bps margin impact for tier-1 IT companies and 20–50 bps for mid-tier peers.

On the earnings front, Indian equities are likely to see a turnaround from its underperformance in the coming quarters with reasonable valuations and the likely easing of the earnings cuts trajectory, brokerage Motilal Oswal Financial Services said in a strategy report Tuesday. "A better earnings cycle, decent valuations, and a base of underperformance set the stage for potential up-move in market and valuation expansion for Indian markets," Motilal Oswal said. It believes that markets will see through the near-term haze of sales deferral due to reduction in GST and instead focus on the higher demand potential opening up for the next several quarters.

Private defence companies are expected to report a 16-18% growth in revenue this year, led by continued strong domestic demand, Crisil Ratings said in a report. This follows a 20% compound annual growth rate logged between 2021-22 (Apr-Mar) and FY25, it said. "The strong growth momentum is supported by a significant policy push by the government, which drew in sizeable private investments. Profitability is seen stable with operating margin range-bound at 18-19%," the ratings agency said.  End

Edited by Akul Nishant Akhoury

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