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Nifty 50 broke out above 26,100 on Thursday, but could not sustain the momentum and closed the week below 25,800. Sentiment from here on is contingent on several pieces of the puzzle falling into place: from progress on a trade deal with the US, to domestic demand and private capex responding positively to GST 2.0. Whether the index achieves new lifetime highs or continues to backtrack in the coming months is anybody’s guess.
Whatever happens with the broader market, one thing is for sure: not all stocks have joined in the recent revival. The ones listed below are still struggling near their 52-week lows.
Are they screaming buys or value traps? Let’s find out.
Tejas Networks: top line growth obscured deeper troubles
Tejas Networks used to be an investor darling before falling out of favour in July 2024. Domestic mutual funds, FIIs, as well as super investors such as Vijay Kedia have pared their stakes in this stock since then, resulting in a massive 60% correction. Yet, this multibagger is still trading almost 500% higher over the past five years. With the stock near the critical support level of ₹500, investor sentiment now rests on a host of push-and-pull factors.
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Backed by large orders from the likes of BSNL, the broadband, optical and wireless networking company had grown its quarterly revenues exponentially from Rs.50-100 crore in 2020 to ₹2,500 crore in December 2024 quarter. It also made a name for itself as one of the biggest R&D spenders among listed companies in India.
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But as pseudo-private companies formed the bulk of its clients in a fast-evolving technological landscape, its inventory was piling up even as its receivables weighed on cash flows.
Making matters worse, its order book could not keep up with revenues. The result? While profits grew, cash flows were sluggish. Things came to a head in the March quarter, when provisions and inventory write-offs plunged it back into losses. The completion of a large order from BSNL led to revenues crashing to ₹200 crore levels in the subsequent quarter.
The September quarter numbers reported earlier this week did not do much to calm investors’ nerves either. Revenue remained at ₹262 crore, pre-tax loss expanded to ₹473 crore, and the cash balance shrunk by 24% sequentially. With an order book of ₹1,200 crore as of September 2025, despite shrunken revenues, visibility stands at only about a year. As competition heats up, things could take a turn for the worse.
However, there is hope. Featuring among the top 10 global suppliers in the optical aggregation and fibre broadband markets, Tejas has the R&D capabilities and operational track record required to ride the 5G wave. An upcoming BSNL order could lift sentiment over the near term, and its price-to-book ratio of 2.9 offers comfort. But sustained stability in earnings is contingent on the successful execution of its global ambitions and diversification of its client base.
ACC: falling behind peers
Cement manufacturer ACC’s stock is among the few that have gone nowhere for the last five years. With a CAGR of just about 3%, the Adani Group stock has frustrated investors by not even beating fixed deposit (FD) returns. Its parent firm Ambuja Cement has fared much better, more than doubling investor wealth over this period. What gives?
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The governance issues plaguing the Adani Group have weighed on both ACC and Ambuja. Subdued cement prices owing to low government spending amid elections last year affected the entire industry, but smaller players bore the brunt of the overcapacity. Cement makers focused on the fragmented market in the south were particularly affected by pricing pressures. But ACC has been underperforming even compared to other south-focused players such as Ramco.
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There are two reasons for this. Master supply agreements (MSAs) with group companies have supported volume growth in recent quarters but have diluted margins. And channel checks by Motilal Oswal suggest an impending merger between Ambuja and ACC into a single brand, Adani Cement. This is expected to keep weighing on ACC’s stock price despite revenue growth and stable margins.
That said, the industry’s long-term demand prospects remain promising thanks to rapid urbanisation, continued government spending on transportation and other infrastructure, and growing real estate and construction demand. ACC’s capital expansion, including the recently commissioned Sindri plant, and its progress on enhancing the share of green power in fuel costs, position it well to capitalise on these industry tailwinds.
Of course, recent news of capacity expansion by large players including Ultratech could halt the nascent improvement in realisations. And amid the merger overhang, investors would do well to analyse Ambuja and ACC as a combined entity that tilts in favour of Ambuja. Nevertheless, zero debt and a palatable EV/Ebitda ratio of 7.9 can help absorb any shocks in the Q2 earnings at the end of this month.
Bajaj Housing Finance: competition and monetary policy easing play spoilsport
Bajaj Housing Finance (BHFL) is the second-largest listed housing finance company in India. Despite strong parentage, 30% CAGR growth in assets under management (AUM) between FY20 and FY25, and gross non-performing assets (NPAs) contained at 0.3-0.35%, the stock has eroded 30% of investor wealth since it was listed in September 2024. To be sure, it had listed at an 115% premium in what turned out to be an ill-timed IPO that was immediately followed by a broad market correction. But is there more to the story than a drop in investor enthusiasm following a mistimed listing?
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Amid stress in unsecured retail lending, regulatory changes in gold loans, and limited corporate credit demand, banks have been seen shifting focus towards housing finance. The intense competition that has resulted from this, particularly in the prime segment, is expected to weigh on BHFL’s growth, yields and margins, keeping a lid on its return on equity (ROE) over the medium term.
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While a growing share of non-housing loans (44% in FY25) could alleviate some of the competitive pressure, it is expected to increase the lender’s gross NPA to 0.4-0.6%. Also, 60% of its borrowings are linked to fixed rates, while almost all of its advances are on floating rates. As a result, in the ongoing monetary easing cycle, BHFL’s spreads have compressed, and net interest margin (NIM) has contracted from 3.8% in FY23 to 3.3% in FY25.
Against this backdrop, the stock’s valuation of 3.6 times estimated FY27 book value, a 60% premium to the IPO price, could limit further upside. However, BHFL has the ingredients in place to retain market leadership. With 77% of its housing loans given to salaried borrowers with a CIBIL score above 750, and conservative loan-to-value (LTV) norms, it has maintained superior asset quality and controlled credit costs over the years. Customer acquisition costs are low as well, thanks to cross-selling across the Bajaj conglomerate.
To sum it up, a mere correction in a stock is not reason enough to accumulate it. It may be an attractive buy if the correction is due to short-term headwinds that are expected to reverse on strong fundamentals over the medium to long term. But companies with long-term structural overhangs warrant caution.
For more such analysis, read Profit Pulse.
Ananya Roy is the founder of Credibull Capital, a Sebi-registered investment adviser. X: @ananyaroycfa
Disclosure: The author does not hold shares of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers are encouraged to conduct their own research and consult a financial professional before making any investment decisions.
