12/11/26, again Adani and Ambani and JSW why not others capable?

 

India’s energy storage market is entering a new phase as the country expands its renewable energy capacity. Solar and wind generation are intermittent, creating a mismatch between when power is generated and when it is consumed. Energy Storage can address this challenge.

The country needs around 411 GWh of energy storage capacity by FY32, compared with just 5.3 GWh of operational battery storage as of October 2026. The government is addressing this gap through financial incentives, support for domestic manufacturing and new project allocations. Its latest move is a ₹14,500 crore funding scheme to support 92 GWh of new storage capacity.

Expanding renewable installations will keep demand for battery storage higher. This is opening opportunities across the energy value chain, from battery manufacturing and renewable energy generation to developing large-scale storage projects.

Three companies with some of the largest under-construction capacities are leading the race. One is building an integrated battery manufacturing ecosystem. Another is combining battery and pumped hydro storage with its expanding renewable energy portfolio.

Meanwhile, the third is deploying battery systems alongside large-scale solar and wind projects. Their strategies differ. But all three are looking to capture a share of India’s emerging energy storage market.

👉 Reliance Industries: Building a 100 GWh Battery Manufacturing Ecosystem

Reliance Industries is setting up its Battery Energy Storage System (BESS) giga-factory at the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar, Gujarat. The company has finished civil construction work for the facility. Equipment installation is underway, and the plant is in an advanced stage of commissioning.

Scaling to 100 GWh: Inside the Jamnagar Giga-Factory

The facility is designed to open with an annual capacity of 40 gigawatt-hours (GWh). Over time, the company plans to scale total annual capacity to 100 GWh. Management said during the Q2 FY27 earnings call that the pack and container line is scheduled to go live in H1CY2027. This line covers up to 40 GWh of containerised storage.

Battery cell production lines will follow later in the year. Cell capacity is planned for roughly 35-40 GWh. The company plans to ramp up manufacturing between June and December 2027. Initially, the production lines will focus on Lithium Iron Phosphate chemistry. These batteries are intended for utility-scale storage projects and electric mobility applications.

The Kutch Mega-Project: Targeting 10% of India’s Power

To support large-scale deployment, Reliance is developing a renewable energy generation and transmission hub in Kutch, Gujarat. At full build-out, the project plans to deploy 150 megawatt-hours of battery containers and 55 megawatt-peak of solar modules each day. The facility is projected to supply around-the-clock green power.

Timeline to Profitability: New Energy Revenue by FY28

Management expects this to meet 10% of India’s electricity demand within a decade. Reliance is also building an integrated energy hub, combining BESS units with modular compressed biogas facilities and solar installations.

The company has already built a base for its integrated hub in Andhra Pradesh. Management expects the New Energy business to begin generating revenue from FY28.

👉Adani Green: Targeting 50 GWh of Battery Storage by FY30

Battery Energy Storage Systems are a core pillar of Adani Green’s energy portfolio. During Q2 FY27, the company commissioned 3 GWh of battery storage at the Khavda renewable energy site in Gujarat. This addition raised Adani Green’s total operational BESS capacity to 6.6 GWh as of September 30.

Scaling to 50 GWh: Inside the Storage Pipeline

Management claims this 6.6 GWh fleet today represents over 50% of India’s total operational BESS capacity. The company is scaling its energy storage installations alongside solar and wind assets. Adani Green expects to exceed 10 GWh of installed battery capacity by the end of FY27. The company plans to build 40 to 50 GWh of battery storage by FY30.

Virtual Transmission: Solving Grid Curtailment

This storage pipeline is designed to operate alongside 45 GW of renewable capacity and 5 GW of pumped hydro storage. Adani Green uses battery storage as virtual transmission. The batteries absorb excess solar output during midday when grid lines cannot take additional load.

Management estimates that a 10 GWh battery system can absorb about 2 to 2.5 GW of peak solar power. This prevents plant backdowns and allows the power to be discharged during evening peak periods. Management expects curtailment impacts to decline as battery installations expand.

Out of the 6.6 GWh of operational capacity, 3.5 GWh is tied up under long-term Power Purchase Agreements. Contracting for the remaining 3.1 GWh is currently underway. The company enters into agreements (25-year term) with clients that hold a rating of AA+ or higher. Management aims for an asset-level Return on Assets of 13% to 14%.

Adani Green Q2FY27 Financials: 16% Surge in Net Profit

Power sales from recently commissioned battery capacity have begun contributing directly to quarterly EBITDA. In Q2FY27, EBITDA and revenue from power sales increased by 51% and 45% year-on-year, reaching ₹3,835 crore and ₹4,019 crore, respectively. Consolidated net profit surged 16% to ₹747 crore.

👉JSW Energy: Building a 40 GWh Energy Storage Portfolio

JSW Energy plans to reach 40 GWh of energy storage capacity by 2030. Under this plan, the company has already locked in 29.6 GWh of storage capacity. Of this secured capacity, 26.4 GWh consists of pumped hydro storage. A ‘locked in’ status means customers are already in place and will pay a fixed price for storage availability.

Securing 29.6 GWh: Inside the Storage Pipeline

The remaining 3.2 GWh consists of battery energy storage systems (BESS). This battery portfolio combines contracted projects with near-term pipeline assets. The company expects storage assets to supply dependable electricity as its renewable generation expands. The 3.2 GWh BESS portfolio includes several utility, commercial and pipeline allocations.

SECI (Kerala): A 0.5 GWh standalone battery project with viability gap funding. The contracted tariff is ₹4.41 lakh per MW per month.

RVUNL (Rajasthan): A 0.5 GWh battery project, also supported by viability gap funding. The agreed tariff is ₹2.24 lakh per MW per month.

Group Captive: A 0.5 GWh allocation distributed across group businesses at various agreed tariffs.

KREDL: A 0.1 GWh battery setup contracted at ₹4.31 lakh per MW per month.

FDRE: A 0.1 GWh battery project linked to firm dispatchable power at ₹4.98 lakh per MW per month.

SECI XV and Rajasthan Pipeline: A combined 1.5 GWh of pipeline storage capacity where energy storage agreements remain to be signed.

The company plans to commission 1.0 GWh of BESS (Battery Energy Storage System) capacity during the 2027 fiscal year (FY27). This initial 1.0 GWh capacity consists of standalone battery installations. These systems are primarily located in two states (Rajasthan and Kerala) and will operate entirely under dedicated ‘Energy Storage Agreements’ (ESAs).

Battling Grid Bottlenecks with BESS Integration

Power curtailment across the company’s operating assets reached about 4.8% in H1FY27. Most transmission constraints occur in the Northern grid, mainly in parts of Rajasthan and Gujarat. Management plans to use battery storage directly to address these grid bottlenecks. Integrating battery systems with solar allows the storage of excess electricity generated during the day.

The stored electricity can then be fed into the grid during high-demand evening hours. This approach helps protect generation volumes from grid congestion. At the same time, the company is preparing to enter the evening market directly. It applied eight months earlier for evening grid connectivity on commissioned solar plants.

The plan specifically involves developing solar capacity to charge batteries. During the evening, when electricity demand peaks, power will be supplied via existing grid connections. Any capacity developed under this arrangement for evening power supply will be in addition to the existing 3.2 GWh pipeline.

Q2FY27 Financials: Net Profit Surges 50%

Total revenue grew 24% year-on-year to ₹6,658 crore. Higher long-term net generation and incremental revenue from newly commissioned and acquired assets supported growth. EBITDA rose 23% to ₹3,907 crore, with a 59% margin. Net profit surged 50% to ₹1,056 crore. Cash net profit grew 39% to ₹2,099 crore.

Renewable segment revenue expanded 32% year-on-year to ₹2,532 crore. EBITDA (excluding other income) increased 31% to ₹2,195 crore. On the balance sheet side, operational net debt to trailing twelve months EBITDA declined to 4.94x. As of Q2FY27, total net debt stood at ₹65,576 crore, while cash and cash equivalents amounted to ₹15,698 crore.

The Valuation Mismatch: Discount vs Growth Premium

The three companies have different return profiles as they operate in different business segments. Reliance Industries trades at an EV/EBITDA multiple of 9.4x, below the 10-year median of 11.7x but above the industry multiple of 5.7x. Its Return on Capital Employed (ROCE) is 5.7% and Return on Equity (ROE) is 10.3%, indicating relatively modest capital efficiency.

This reflects the capital-intensive nature of its diversified business and ongoing investments in its New Energy ecosystem. JSW Energy trades at 14.5x EV/EBITDA, above both the industry and historical 10-year median valuation. Its ROCE of 9.2% and ROE of 8.2% indicate an asset-heavy business.

Written by Madhavendra

Source : Financial Express

12/11/26, Benchmark indices Sensex and Nifty pared their gains

Benchmark indices Sensex and Nifty pared their gains on November 12 due to various reasons, including profit booking.

At 11:19 am, the Sensex was up 190.29 points or 0.23% at 82,069.69, and the Nifty was up 41.75 points or 0.17% at 25,296.80. About 2,375 shares advanced, 1,391 shares declined, and 199 shares were unchanged.

 Non-banking financial companies remained the top gainers in the Nifty 50 index. HDFC Life Insurance Co., SBI Life Insurance Co., Shriram Finance, Bajaj Finserv, and Bajaj Finance were up 2-3%. The index tracking the sector, Nifty Financial Services, was up over 1%. The shares of insurance companies rose after the data released by the Life Insurance Council showed the first-year premium income of life insurance companies rose 26.2% on year to Rs 42,914 crore in October. Meanwhile, the first-year premium income in Apr-Oct rose 21.4% on year to Rs 2.89 lakh crore. Banks continued their positive momentum supporting the gains in the index. ICICI Bank, HDFC Bank, and State Bank of India were up 0.5-1.5%. The Nifty Bank was up 0.6%.

Meanwhile, fast-moving consumer goods company Nestle India was the top laggard in the Nifty 50 index, down nearly 2%. Heavyweight Bharti Airtel and automobile major Mahindra & Mahindra were down around 1% each, limiting the gains in the index. Infrastructure major Larsen & Toubro also weighed on the headline indices, down 0.5%.

Key reasons behind market paring gains

1) Profit booking

The markets saw profit booking at higher levels as the benchmarks hit eight-month high on November 12. Robust FII inflows have pushed the Nifty 50 and Sensex indexes up 9.6% and 10%, respectively, so far in November.

Sensex fell 250 points from day's high while Nifty was trading below 25,300-mark.

2) Selling in IT, pharma shares

Selling in IT, pharma shares led to the markets paring their gains on November 12.

3) Technical reason

Nifty needs to trade above 25,400 for any further bullishness to emerge in the market, said analysts.

Written by J. Jagannath

Source:Network18

12/11/26, Nvidia has been caught in a perfect storm. A correction in expensive AI stocks, concerns over the returns on the enormous investments in data centres and most importantly, uncertainty surrounding its maverick and now infamous chief executive Jensen Huang have combined to rattle investors.

The stock closed at $173.73 on November 11, against a 52-week high of $243.37 — a decline of nearly 29%. The sell-off has been particularly sharp in November. After reports that the board was preparing to remove Jensen Huang, The shares fell about 8%  in after-hours trading. Nvidia has shed about $1.7 trillion in market value from its October peak, with its valuation slipping from $5.6 trillion to roughly $3.8 trillion in after-hours trading on November 11.

The question for investors is whether this has created a meaningful valuation opportunity. Nvidia's business fundamentals remain formidable. But the risks have become more complicated, and the market is no longer looking at the company through the lens of earnings alone.

The earnings engine is still firing

Nvidia's latest reported numbers leave little doubt about the strength of its business. Revenue in the second quarter of fiscal 2027, ended July 26, rose 106% year-on-year to $96.2 billion. Data-centre revenue, the principal driver of the AI boom, grew 117% to $89 billion. Non-GAAP earnings per share rose 120% to $2.22. Gross margin was 75%.

The company had guided for third-quarter revenue of $108 billion, plus or minus 2%, with gross margin of around 74%. The market is looking for revenue of approximately $109 billion and adjusted earnings of $2.47 a share for the quarter ending October. That would represent revenue growth of about 91% and earnings growth of around 90% over the year-ago period.

These are extraordinary growth rates for a company of Nvidia's size. But the challenge is that investors have become accustomed to the company beating expectations. So a result that is technically strong but fails to raise the bar sufficiently may not be enough to revive the stock.

Nvidia's earnings announcement slated for November 17 will be crucial test. Investors will be looking beyond the headline numbers to three things: the outlook for data-centre revenue, the pace at which new-generation chips and systems are ramping up, and whether gross margins can remain close to current levels.

While there are reasons to believe demand for Nvidia's chips will remain robust, the key question is will the pace of spending growth and the returns on that investment continue? Bloomberg Consensus pegs earnings estimates for Nvidia at $4.77 for FY26, $9.33 for FY27, $15.9 for FY28, $21.4 for FY29 and $25.3 for FY30 – and this means a P/e of 17x for FY27, 10x for FY28, 7.3x for FY29 and 6.2x for FY30. That's super attractive.

On October 6, of all the analysts tracking the stock listed on Bloomberg, 79 had Buy calls, 2 had recommended Hold and only one recommended Sell. As of November 11, 76 still had a Buy; 3 had changed their recommendations to Hold. The lowest target price was pegged at $194 by broking firm Zacks, which itself by the way, had an Outperform rating on the stock, while the highest target was pegged at $515 by Raymon James which recommended a Strong Buy.

So, what is the risk to businesses? As the estimates bear out, Bloomberg Consensus is baking in a 32% CAGR in earnings till FY30. While most analysts largely take comfort in the fact that the demand for chips remains robust, the fact that Nvidia is not merely selling chips but also investing in and financing parts of the ecosystem that buy its products is a real risk. If customers' funding becomes constrained or their returns on AI investments disappoint, the impact could travel back through the supply chain.

Those are more serious questions on business. But the immediate uncertainty is on governance and CEO succession.

Jensen Huang: The succession risk investors did not expect

The New York Times report of Jensen Huang's another alleged relationship with an Nvidia executive, while investigations are ongoing with respect to his relationship with Alice Huang and for facilitating chip shipments to Chinese firms only amplifies the succession risk.

The Wall Street Journal has also reported that the board was preparing to remove Huang. Now, why does this matter so much to investors? Huang is not a conventional professional CEO who happens to run a successful technology company. He co-founded Nvidia and has led it for 33 years, shaping its product roadmap, engineering culture and strategic relationships. He owns around 3.6% of the company and has dozens of direct reportees, according to media reports.

There is therefore a serious concern over whether Nvidia can preserve its technological and strategic direction without the person who has driven it for more than three decades.

Warren Buffett once observed that “when a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.” In Nvidia's case, the more pertinent question is whether the company's technological prowess and culture of innovation are strong enough to sustain its competitive edge, irrespective of who is at the helm.

An equally important question is what happens if Jensen Huang is indeed forced out. Where would he go, and could he emerge as a formidable competitor to the very company he helped build and propel to global prominence?

Report by N. Mahalakshmi

Source :Network18 

11/11/26, PostMarket Report and Strategy for 12/11/26

The Nifty 50 extended its upward journey for another session, gaining 0.84 percent on November 11 and taking its cumulative gains to more than 11 percent over the past two consecutive weeks. The bulls continue to dominate, with the broader market structure remaining healthy, supported by easing oil prices and persistent FII inflows. However, the RSI has moved closer to the overbought zone, raising the possibility of intermittent consolidation and profit-booking. The 25,000 mark is expected to provide immediate support to the Nifty 50, followed by 24,800 as a crucial support level. On the upside, the index needs to decisively clear the 25,400–25,500 resistance zone to extend its rally towards 25,900–26,000, according to experts, who continue to recommend a buy-on-dips strategy.

Key Levels For The Nifty50 (25,255)

Resistance based on pivot points: 25,384, 25,462, and 25,587

Support based on pivot points: 25,133, 25,055, and 24,929

Special Formation: The Nifty 50 formed a small-bodied bearish candle with upper and lower shadows on the daily charts, indicating indecision between bulls and bears. However, the higher high–higher low structure remains intact, keeping the broader bullish trend unaffected. All key moving averages continued to slope upwards, reinforcing the positive technical outlook. The RSI moved closer to the 80 mark, rising to 79.49, with a strong bullish crossover, indicating robust upward momentum, although the index is approaching overbought territory. The MACD maintained its upward trajectory, although the green histogram bar contracted for another consecutive session, suggesting some moderation in bullish momentum.

Key Levels For The NiftyBank  (60,792)

Resistance based on pivot points: 61,243, 61,484, and 61,872

Support based on pivot points: 60,465, 60,225, and 59,836

Resistance based on Fibonacci retracement: 61,765, 63,550

Support based on Fibonacci retracement: 59,080, 56,928

Special Formation: The Bank Nifty rallied 1.76 percent, with the opening upside gap remaining unfilled, while the higher high–higher low structure continued to remain intact. The index formed a bullish candle with a noticeable upper shadow on the daily charts, indicating that the broader uptrend remains healthy despite some profit-booking at higher levels. All key moving averages continued to trend upwards, with the 50-day EMA moving closer to the 200-day EMA, indicating the possibility of a golden crossover. The RSI inched closer to the 80 mark, rising to 78.61, with a positive crossover, reflecting strong bullish momentum, although it is approaching overbought territory. The MACD maintained its upward trajectory, with the green histogram bars expanding for the ninth consecutive session, indicating strengthening bullish momentum.

Nifty Call Options Data

According to the weekly options data, the 25,500 strike holds the maximum Call open interest (with 90.46 lakh contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,400 strike (66.86 lakh contracts) and 25,300 strike (52.21 lakh contracts).

Maximum Call writing was observed at the 25,400 strike, which saw an addition of 44.72 lakh contracts, followed by the 25,300 and 25,350 strikes, which added 34.97 lakh and 31.2 lakh contracts, respectively. The maximum Call unwinding was seen at the 25,000 strike, which shed 24.28 lakh contracts, followed by the 24,900 and 25,100 strikes, which shed 9.47 lakh and 5.21 lakh contracts, respectively.

Nifty Put Options Data 

On the Put side, the maximum Put open interest was seen at the 25,000 strike (with 54.23 lakh contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 24,800 strike (43.94 lakh contracts) and the 25,200 strike (29.86 lakh contracts).

The maximum Put writing was placed at the 25,200 strike, which saw an addition of 26.96 lakh contracts, followed by the 25,300 and 24,800 strikes, which added 26.22 lakh and 18.74 lakh contracts, respectively. There was hardly any Put unwinding seen in the 24,750-25,700 strike band.

Nifty Bank Call Options Data 

According to the monthly options data, the 60,500 strike holds the maximum Call open interest, with 10.16 lakh contracts. This can act as a key level for the index in the short term. It was followed by the 61,000 strike (7.23 lakh contracts) and the 62,000 strike (7.02 lakh contracts).

Maximum Call writing was observed at the 62,000 strike (with the addition of 2.06 lakh contracts), followed by the 61,000 strike (1.98 lakh contracts) and 61,500 strike (1.32 lakh contracts). The maximum Call unwinding was seen at the 60,000 strike, which shed 3.18 lakh contracts, followed by the 59,500 and 59,600 strikes, which shed 1.95 lakh and 61,260 contracts, respectively.

 Nifty Bank Put Options Data 

On the Put side, the maximum Put open interest was seen at the 60,500 strike (with 11.44 lakh contracts), which can act as a key level for the index in the short term. This was followed by the 60,000 strike (6.99 lakh contracts) and the 61,000 strike (3.41 lakh contracts).

The maximum Put writing was placed at the 60,500 strike (which added 8.95 lakh contracts), followed by the 60,000 strike (4.37 lakh contracts) and 61,000 strike (2.63 lakh contracts). The maximum Put unwinding was seen at the 59,200 strike, which shed 29,970 contracts, followed by the 59,300 and 59,400 strikes, which shed 18,930 and 15,930 contracts, respectively

Report by Sunil Sankar Matkar 

Source:Network18

11/11/26, Banking shares led the market rally Today

Banking shares led the market rally on Wednesday, with the Nifty Bank surging over 1,653 points, or 2.76 percent to cross the 61,350 mark as easing crude oil prices improved investor sentiment towards domestic equities.

The strong buying in banking and financial stocks came as benchmark indices climbed to an eight-month high, supported by strong foreign fund inflows after a prolonged two-year period of outflows. Easing crude prices have also helped ease concerns over pressure on the rupee, a key consideration for overseas investors.

Analysts also attributed the rally to attractive valuations post the recent downtrend.

The Nifty Bank hit a high of 61,394.30, leaving the index nearly 350 points away from its all-time high.

Sunny Agrawal, Head - Fundamental Research at SBI Securities, noted that the valuations had turned attractive over the past quarters amid a downbeat market environment, especially for large-cap private sector banks.

"Strong systemic credit growth across segments, positive margins inflection underpinned by repo rate hikes, robust liquidity aided by FCNR (B) deposit accretion, and lower slippages resulting in benign asset quality are some of the other reasons for the recent banking sector rally," he added.

Brent crude futures fell to a two-month low of $89.16 per barrel in the previous session after US officials played down the possibility of further military action against Iran, easing concerns over potential supply disruptions.

Lower crude oil prices are seen as positive for the Indian economy, given the country's dependence on oil imports. A moderation in crude prices can help contain inflation, ease pressure on the current account and support the rupee. It can also provide the Reserve Bank of India with greater room to consider monetary easing, although the impact on interest rates and bank stocks would depend on the broader inflation and growth outlook.

Buying was broad-based across the 14 constituents of the Nifty Bank, with Bank of Baroda emerging as the top gainer, rising 6 percent.

Punjab National Bank and Federal Bank gained 4.71 percent and 4.21 percent, respectively. Among heavyweight lenders, Yes Bank, State Bank of India, HDFC bank, Kotak Mahindra Bank and ICICI Bank advanced up to 3.5 percent.

The rally also extended to other financial stocks, with the Nifty Financial Services index rising 2 percent, taking its monthly gains to 13 percent, so far.

Both public and private sector lenders participated in the buying. The Nifty Private Bank index gained 2.12 percent, while the Nifty PSU Bank index advanced 3.5 percent.

"Going ahead, we are constructive on large cap PVBs (ICICI, AXIS, HDFC), SMIDs (DCB, KVB, CUBK). We are selective in the PSBs and prefer Indian Bank," said Agrawal.

Report by Paras Bist

Disclaimer: The views and investment tips expressed by investment experts here are their own and not of us. We  advise traders and investors  to check with certified experts before taking any investment decisions.

11/11/26, INDEX GRAPHS

 NIFTY50

NIFTY BANK 

11/11/26, IT vs AI by Sameer Arora

 The recent correction in technology stocks should not be mistaken for the end of the artificial intelligence trade. The more important question is not whether AI-linked stocks are falling, but whether the investment in AI infrastructure and applications is slowing. And, by that measure, the cycle remains firmly intact, says Samir Arora, founder of Helios Capital.

Arora argues that investors are conflating two very different things: the performance of AI-related stocks and the spread of AI itself. The latter, he believes, is continuing, with some of the world's largest technology companies not only maintaining their investment plans but stepping them up.

“When Google, Meta and the others say we will invest $200 billion or $250 billion, and their stock prices fall, is that a failure of US AI? Or does that mean the real spenders on AI continue to believe in it, perhaps even more than they did before?” he asks.

Arora cautions against celebrating a fall in US technology stocks on the assumption that the money will automatically flow into Indian equities or that Indian IT services companies will become beneficiaries of a failed AI trade.

That, he says, is a misleading way to read the market. “AI trade, whether the stock price goes up or down as of now, is not failing,” he says. By AI trade, he means the continuing investment and adoption of the technology, not the day-to-day movement in the share prices of companies associated with it.

Big Tech's spending may earn reasonable return

Arora remains reasonably constructive on the large US technology companies, but says investors should look beyond the headline capital expenditure numbers and assess the revenue that this investment can generate over the next two to four years.

The market, in his view, is focusing on the money being spent without adequately considering the future revenues from the computing capacity being created.

He does not expect these investments necessarily to deliver the extraordinary profits that investors have become accustomed to from some of these businesses. Instead, he sees AI infrastructure increasingly resembling a utility business.

“It is more of a utility kind of business. It is like somebody setting up a nuclear plant or a power plant. Basically, you will get rental income out of it. But still, it won't be bad,” he says.

Arora believes the large technology companies can earn a reasonable return on their capital expenditure while also strengthening their existing businesses and participating in a new growth opportunity.

He points to the scale and credibility of the companies making these investments. Unlike the dotcom boom of 1999, when money flowed into a multitude of speculative internet ventures, the current AI investment cycle is being led by established companies with substantial businesses and cash flows.

“This is not like '99, where the internet guys were basically people leaving their regular jobs and starting travel channels and paid food channels and websites, and then getting private equity money. Here, the guys spending the money are Amazon, Google, Meta and Microsoft…,” he says.

For these companies, the hurdle is not necessarily to generate outsized profits from AI immediately. They need to earn a reasonable return on the incremental capital invested and use the technology to support their broader businesses.

Big Tech Vs pure-play AI stocks

Arora makes an important distinction between the large technology platforms and companies whose valuations depend almost entirely on AI.

Amazon, Meta and Microsoft, he points out, have substantial non-AI businesses. They should therefore not be clubbed together as pure-play AI stocks.

The more speculative end of the market includes semiconductor-related plays and new AI ventures. On the latter, Arora is decidedly cautious.

He does not see a compelling reason for public-market investors to buy into start-ups such as Anthropic or OpenAI at the valuations being discussed.

“For them to prove that AI is making money at that starting public-market valuation, that is an extremely difficult thing,” he says.

While established technology companies can afford to invest in AI because the technology can reinforce existing revenue streams and create additional business opportunities, a pure-play AI company, by contrast, has to justify its valuation largely through its ability to monetise AI itself.

Arora believes that is a much more difficult proposition, particularly at elevated valuations.

Google is ‘confusing'

Among the large technology companies, Google presents a more complicated investment case. It is the biggest individual stock holding in Arora's global fund, but he acknowledges that the disruption posed by AI to its core search business creates uncertainty.

The concern is straightforward: if users increasingly turn to AI tools such as Gemini for answers rather than using conventional search, Google's established search business could come under pressure.

Arora says Google will have to find ways to carry advertising into AI-generated answers. How it does so remains uncertain.

“Google is the only one a bit confusing, actually, although in our fund, it's the number one holding in terms of individual stocks,” he says. At its current valuation, he believes Google could find new ways to monetise the answers generated by AI.

“At the end, everybody has to monetise the answers,” he says.

The memory shortage opportunity

Arora also sees opportunities in semiconductor-related companies. He specifically mentions owning Samsung, pointing to the continuing shortage in memory chips.

His investment case rests on the expectation that the shortage could persist for another four to five years. Even if earnings eventually moderate after that period, he argues, investors should not assess the business as though those lower earnings will arrive immediately.

The company would have had several years of growth or stable earnings before that moderation. That changes how the eventual decline should be valued.

His broader point is that investors should distinguish between a normalisation of earnings after an exceptional period and a collapse in the underlying business.

The semiconductor cycle may not sustain abnormal growth indefinitely, but that alone does not invalidate the investment case.

Super bearish on Indian IT

Arora is particularly dismissive of the argument that a fall in US AI stocks automatically benefits Indian IT services companies, and market movements would make one believe.

When semiconductor and AI-linked stocks declined, Indian IT shares rally, as traders interpret the move as evidence that AI investment was losing momentum and traditional technology services could regain relevance.

Arora calls this a flawed interpretation. The correction in a stock price does not mean that the underlying technology is losing momentum. If the companies investing in AI continue to increase their capital expenditure, the threat and opportunity for traditional IT services remain very much alive.

He is, in fact, more bearish on Indian IT after seeing the market celebrate the decline of other technology companies. “We are not bearish anymore on India IT; we are super bearish,” Arora said.

According to Arora, the AI investment cycle is still unfolding. The market may be reassessing valuations, the scale of capital expenditure and the returns that technology companies can earn. But the technology itself is not losing momentum and there are pockets attractively priced after the recent fall.

Source:Network18

11/11/26, Indian benchmark indices are likely to see a muted opening on November 11, tracking GIFT Nifty, which is trading flat at 25,326.50 in early trade.

Indian benchmark indices ended higher in the volatile session on November 9. The Sensex closed 107.25 points, or 0.13 percent, higher at 81,106.65, while the Nifty gained 58.25 points, or 0.23 percent, to settle at 25,044.65 on Monday.

Both benchmarks recovered from steep intraday losses to end in positive territory following the closing auction session. Market breadth remained negative, with 2,316 shares declining, 1,922 advancing and 205 unchanged.

 👉Here is how financial markets across the globe fared overnight:

GIFT Nifty (Flat)

GIFT Nifty was trading with little change at around 25,326.50 in early trade, indicating a flat start for the domestic equity markets.

Asian Markets (Up)

Asian stocks rose in early trading after better-than-expected earnings from CoreWeave Inc. eased concerns over the outlook for the artificial intelligence trade, helping counter a Wall Street selloff fueled by hotter-than-expected US

inflation.

Japan's Nikkei 225 rose as much 0.3%, while South Korea's Kospi swung between gains and losses.

US Equities (Slip)

US stocks closed lower on Tuesday, as a hotter-than-expected inflation reading hardened expectations for a rate hike from the Federal Reserve next month and ​fueled concerns the central bank may be more aggressive in raising rates.

The Dow ​Jones Industrial Average fell 157.86 points, or 0.30%, to 52,231.89, the S&P 500 lost 29.01 points, or 0.38%, to 7,520.93 and the Nasdaq Composite lost 187.26 points, or 0.74%, to 25,065.87.

Dollar Index (Up)

The dollar held gains near a two-week high in early Asian trade on Wednesday as a hotter-than-expected inflation report and hawkish comments from Federal Reserve officials fuelled bets the central bank will raise rates next month.

The US dollar index, which measures the greenback's strength against a basket of six currencies, was steady at 102.22, closing in on its highest level since October 28.

US Bond Yield (Flat)

The yield on the US 10-year Treasury bond and 2-year Treasury bond was trading with little change at 4.99% and 4.73%, respectively.

Asian Currencies (Mixed)

Asian currencies traded mixed against the US dollar on November 11, with the Indonesian rupiah, South Korean won and Thai baht registering gains against the previous close. The rupiah rose 0.13 percent, while the South Korean won advanced 0.38 percent and the Thai baht gained 0.05 percent.

On the other hand, the Philippine peso declined 0.37 percent, followed by the Malaysian ringgit, which fell 0.32 percent. The Taiwan dollar and Japanese yen shed 0.19 percent and 0.11 percent, respectively, while the Chinese renminbi and Singapore dollar edged lower by 0.08 percent and 0.02 percent.

Crude (Up)

Oil steadied after a two-day decline, with traders looking for signs of further de-escalation in the Iran war.

West Texas Intermediate traded near $86 a barrel, after sliding almost 5% in the week's first two sessions, while Brent

was below $92.

While US President Donald Trump has said further strikes on Iran wouldn't be necessary, there have been flareups in the region and little sign of progress in talks between the sides.

Gold (Flat)

Gold extended its decline after a hotter- than-expected US inflation report and remarks from policymakers reinforced bets that the Federal Reserve will raise interest rates next month.

Bullion fell as much as 3% to trade below $4,015 an ounce.

Fund Flow Action

Foreign institutional investors (FIIs) remained net buyers, purchasing equities worth Rs 7,212 crore on November 9. Meanwhile, domestic institutional investors (DIIs) extended their selling streak to the eighth consecutive session, offloading equities worth Rs 7,172 crore.

Report by Rakesh patil

Source:Network18