Source: CNBCTV18
Shares of real estate companies are trading with gains of as much as 6% on Friday, June 6, after the Reserve Bank of India (RBI) announced a 50 basis points cut in its benchmark repo rate. This marks the third consecutive rate cut by the central bank, following reductions in February and April.
#CNBCTV18Market | Nifty crosses 25,000 for the first time since May 27 after #RBIPolicy pic.twitter.com/Pigbw7hoGG
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
Digant Haria, Founder, GreenEdge Wealth Services: “The weak liability franchise stocks like an IndusInd Bank, an IDFC Bank, or RBL Bank, and all the small finance banks like Equitas, they are the ones who suffered big brunt of the tight deposit and liquidity environment for the last 12 months. They will see a good reversal, not just in growth, but even in margins and the asset quality. So, that is where the biggest data in terms of earnings is.
So, we will focus on not the top 8-9 large banks, but the banks which are below that, which suffered over the last year, that should be the first basket one can look at. The second basket will obviously be the interest rate sensitive, the real estate stocks; not the luxury ones like Oberoi, because luxury is indifferent to real estate. But at least somebody who is selling in Rs 50 lakh to Rs 2 crore kind of ticket size, those real estate stocks and auto stocks are also somewhat interest rate sensitive.
So, something like car stock and we also saw that budget, where consumers are given some bonus. So, combine all of this, we should be seeing good festive season this time, at least, that is our hope. So, these three baskets are where we are focused for stock ideas.”
Digant Haria, Founder, GreenEdge Wealth Services: “This rate cut and liquidity infusion tells us one thing that somehow the growth is not picking up, the economy has been slow. So, while it is a reason to celebrate, it is also an acknowledgement that growth is not as what the RBI is expecting or what our country’s potential is, especially if we see the consumption sector, the auto sector; even the real estate sector slowed down. So, this is a step in that direction and the banks, we all know that initially one or two quarters is something where they suffer because of these rate cuts because the customers are expecting that some of these rate cuts will be passed on immediately and the deposit rates are slow to respond. And even the rate cut which happened two months back, the deposit rates did not move down as fast as the loan rates. So, another three-six month of margin pressures for banks is there. We just want that the growth has to recover. The system growth is at 9% currently; the loan growth for the system – that has to go to 12-13% because that is where our equilibrium is. The global macros are good. Now the domestic macros will significantly improve after this. So, I am very hopeful that after monsoons, we will see good demand pick up. Banking stocks can do well. But in largecap banks, you have to be careful because there is not much upside. But there are lot of these weak liability franchise – that’s our hunting ground.”
RBI Reax: Lakshmanan V, Federal Bank
On credit growth: Credit growth, if you look at the banking system growth on the balance sheet, it has been on a downward trajectory. A lot will depend not only in terms of the monetary action that’s happened today, but overall, in terms of the consumer demand, the overall spending intent of corporates per se, given the given the cost of liquidity, as we’re talking about it, and, of course the whole lot of situation across the border in terms of what’s happening in the US, a lot of that is going to be driving in terms of how the companies are going to be spending, how the customers are going to be having a nature for demand. So we still have to wait out and watch as to how the credit growth would happen.
On G-Sec rates: I am not in favour of talking about a 10-year immediately going lower because of 50 bps cut that has happened and the liquidity infusion. The key thing to note is also the fact that the stance has been brought into a neutral right now. So given all of that at this stage, I am not calling for the 10-year going in significantly lower from perhaps the 6.10 that was seen in today.
MPC VOTED TO CUT REPO RATE BY 50 BPS TO 5.50%
Alert: RBI Cuts Repo Rate For The Third Straight Policy
FY26 CPI INFLATION SEEN AT 3.70% Vs 4% EARLIER
RBI STANCE CHANGED TO NEUTRAL FROM ACCOMMODATIVE
MSF & SDF Rates Adjusts To 5.75% & 5.25% Respectively
FY26 REAL GDP GROWTH PROJECTION UNCHANGED AT 6.50%
Real GDP Projection For Q2FY26 Unchanged At 6.70%
Real GDP Projection For Q3FY26 Unchanged At 6.60%
Real GDP Projection For Q4FY26 Unchanged At 6.30%
Q1FY26 CPI Inflation Projection Revised Lower To 2.90% Vs 3.60% Earlier
Q2FY26 CPI Inflation Projection Revised Lower To 3.40% Vs 3.90% Earlier
Q3FY26 CPI Inflation Projection Revised Higher To 3.90% Vs 3.80% Earlier
Q4FY26 CPI Inflation Projection Unchanged 4.40%
CASH RESERVE RATIO CUT BY 100 bps
CRR CUT TO 3% FROM 4%
TO CUT CRR IN FOUR TRANCHES OF 25 bps EACH
CRR CUT TO RELEASE `2.5 LK CR OF LIQUIDITY
Industrial Activity Recovering Gradually, Though Uneven
MPC Felt It Is Now Left With Very Limited Space To Support Growth
Current Account Deficit For FY26 To Remain Well Within Sustainable Levels
Net FDI Important For Forex Reserves
Gross FDI Invest Increased Sharply In FY25
Rise In Repatriation Of FDI A Sign Of A Maturing Market
Stress In Unsecured Loans & Credit Card Portfolios Has Abated
Policy Actions Should Be Seen As Step Towards Boosting Growth
Global Backdrop Remains Fragile, Highly Fluid
Global Growth And Trade Projections Have Been Revised Downwards
Last Mile Of This Inflation Is Turning Out To Be A Little More Protracted
Global Growth, Trade Projections Cut By Multilateral Agencies
Indian Economy Presents A Picture Of Strength, Stability
Indian Economy Offers Immense Opportunities To Investors
The Nifty realty sectoral index surged majorly by about 3% after the RBI announced its decision to cut interest rates by 50 bps, apart from cutting CRR by 100 bps.
Top Stocks
Godrej Properties up 5%
DLF up 4.2%
Oberoi Realty 2.9%
Sobha Ltd up 2.5%
The Nifty Bank index has bounced back after a period of relative decline. The index is currently trading with gains of above 0.75%.
The top-performing stocks in this index include Axis Bank, IDFC First Bank and PNB Bank.
The central bank has introduced a 100 basis point slash. Bringing it down from 4% to 3%.
The Reserve Bank of India has retained its GDP growth projection for FY26 at 6.5%.
#RBIPolicy | @RBI revises inflation forecast for FY26 lower to 3.7% from 4% pic.twitter.com/ijoWq0SOW4
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
The Monetary Policy Committee (MPC) has shifted its policy stance from ‘Accommodative’ to ‘Neutral’.
The Nifty Bank made a sharp recovery after the RBI announced a major decision to cut the interest rates or repo rate by 50 basis points, reducing it to 5.50%.
#RBIPolicy | Global growth and trade projections have been revised downwards
Indian economy presents a picture of strength & stability, says RBI Governor #SanjayMalhotra pic.twitter.com/5iNO0SD7TW
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
The Reserve Bank of India, led by Governor Sanjay Malhotra, has cut the interest rate, or repo rate, further by 50 basis points.
The interest rate now stands at 5.50%.
Pharma Watch: Vishal Manchanda, Research Analyst, Systematix Group
On Dr Reddy’s Laboratories
So I have a hold on DRL as of now. So the sector itself has lot of uncertainties. DRL probably has been doing a lot in terms of putting in lot of licencing relationships with companies to kind of ensure that they continue to grow even with one of their large opportunities. So, basically Revlimid coming off next year, they are putting in pieces together to replace what they lose from Revlimid.
But while they’re putting in pieces together, we are not sure how long these efforts will take in terms of reflecting in the numbers. So one of the large opportunities we have for DRL is semaglutide launch in Canada next year. Again, it’s a large market. They are one of the four filers in Canada who are targeting to launch semaglutide there. We might see more coming through before the patent expiry. So there are a lot of uncertainties in terms of whether the innovator will give market share to the generic players or not. So we’ll have to wait and see. The market size is large, but execution is where things can go wrong. Right now the market size is about a billion dollar in Canada. But that can expand, because once prices come down in terms of volume, the opportunities can expand 20-30% or even higher.
So I have a target valuation multiple of 40 times on FY27 while on my numbers, it’s trading around 60 times FY27. So if I look at the price earning to growth ratio, it’s it should be around 2.5 times of what growth we expect.
While if I look at global peers like Lonza, Buchi which probably have the same growth rates, so their PEG ratios are around, Lonza would be around 1.3x and Buchi is at less than 1x in terms of the valuation. So that is where the disconnect is but having said that Divi’s Laboratories probably does a higher return on equity versus these guys.
On Sun Pharma
my broader rationale for the sector is we need to not be into names that have large US generics exposure. There might be a US exposure, but less of US generics exposure is what I prefer. And if I look at Sun Pharma, their US generics exposure is about 15% of the overall sales, while the peers are around 40-50% so I think US generics is where we I think there will be struggle in terms of growth.
So probably US generics will pull down the growth rate for most companies over the next three to four years. So Sun not being positioned there, and the rest of the 85% of the business of Sun can grow high single digit to mid-teens. So probably Sun can deliver higher growth in the sector versus the peer names.
On Cipla, Ajanta Pharma
Cipla and Ajanta Pharma are the other names I prefer. So again, Cipla, I think there is visibility on a pipeline as far as the US is concerned, their US exposure is also not that large like others.
They are around 30% exposed to the US, so a relatively lower exposure, maybe higher than Sun, but still lower than Zydus, Lupin or Dr Reddy’s Laboratories. So that’s one positive, and I think that domestic franchise is relatively much stronger than other companies in the large cap space, those two are the ones that I like.
#JustIn | #AzadEngineering Large Trade: 48 lk shares (7.4% eq) worth ₹780 cr change hands at an avg ₹1,640/sh via block deals pic.twitter.com/YkElxBA4Iy
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
Here are a couple of stock recommendations by Siddhartha Khemka, Head-Research, Wealth Management at Motilal Oswal Financial Services
On Bajaj Finserv: Today’s block is an overhang in the last few days, but make a point to look at it from a positive perspective. We prefer the underlying business of Bajaj Finance over the holding company, Bajaj Finserv. However, both stocks move in tandem, and hence, a positive view on both stocks is warranted.
On Niva Bupa Health Insurance Company: Recently initiated coverage on Niva Bupa. Positive on the entire health insurance space, where Niva Bupa comes in the midcap space, so we have a buy rating and a target price of ₹100 on Niva Bupa.
The shares of the defence company Cochin Shipyard surged on Friday’s trade by over 7%. This marks the 4th straight session of gains for the company. In these 4 sessions, that company’s shares have risen by close to 25%, with Thursday’s session, with a 12% gain, being the biggest of all. The current price stands at ₹2,478.20.
#CNBCTV18Market | Defence stocks higher, #CochinShipyard up over 6% pic.twitter.com/5223IOveAN
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
The shares of ZF Commercial jumped over 5% on Friday. This came to pass after a large trade saw 6 Lk shares or 3.17% in equity share, worth ₹792 Cr change hands at ₹13,191/sh in the Block Deal Window.
#CNBCTV18Market | Market opens flat ahead of #RBIPolicy pic.twitter.com/dbmUVTLyKi
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
According to Federation of Automobile Dealers Associations’ (FADA) May data, total vehicle retail sales stood at 22.12 lakh units, marking a 3.3% decline month-on-month (MoM) but a 5% rise year-on-year (YoY).
Two-wheeler sales came in at 16.52 lakh units, down 2.02% MoM but up 7.31% YoY.
Commercial vehicle (CV) sales dropped sharply, falling 11.25% MoM and 3.71% YoY to 75,615 units.
#RupeeCheck | Rupee Opens At 85.87/$ Vs Thursday’s Close Of 85.80/$ pic.twitter.com/o2yF19CyMe
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
#JustIn | #ZFCommercial Large Trade: 6 lk shares (3.17% eq) worth ₹792 cr change hands at ₹13,191/sh in block deal window https://t.co/wF7D7lOKsb pic.twitter.com/t7I31IWzBU
— CNBC-TV18 (@CNBCTV18Live) June 6, 2025
Bajaj Finserv witnessed a large block trade with 2.86 crore shares (1.79% equity) changing hands for ₹5,506 crore at ₹1,925 per share.
Brokerage firm JPMorgan has downgraded shares of Tata Motors Ltd. to “neutral” from its earlier rating of “overweight” on Friday, June 6, citing new headwinds that have emerged for the passenger and commercial vehicle manufacturer.
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