Mumbai: Indian stock markets witnessed mixed reactions on Tuesday, with three major firms Karnataka Bank, Gabriel India, and Dixon Technologies grabbing investor attention for dramatically different reasons. While Gabriel India’s shares surged 20% following a strategic business restructuring plan, Karnataka Bank’s stock declined on news of top-level resignations and a brokerage downgrade. Meanwhile, Dixon Technologies faced a reality check as Morgan Stanley downgraded the stock, projecting a steep 23% downside despite increasing its target price.
Karnataka Bank faced turbulence after top executives, including MD & CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao, announced their resignations, effective July 15 and July 31, respectively. Brokerage firm Emkay Global responded with a downgrade from ‘Buy’ to ‘Add’ and slashed its price target by 15% to ₹220.
Emkay cited internal rifts related to a ₹1.5 crore consultancy fee reportedly spent without proper board authorization—as a possible cause of friction that led to the departures. Auditors had flagged the payment in May 2025, demanding it be recovered from the directors.
Emkay believes that this leadership exit could jeopardize the bank’s ongoing retailisation and digital transformation push. Consequently, it cut earnings projections by 6-13% for FY26 to FY28. Still, it acknowledged the bank's strong capital adequacy ratio (CAR) of 19.85% and its valuation attractiveness, holding out hope that a new, external MD might course-correct the situation.
Karnataka Bank said it has formed a search committee to identify successors for both top roles. Despite the reassurances, investor confidence took a hit the stock closed 5.66% lower at ₹195.90, marking an 8% decline in 2025 so far.
In stark contrast, Gabriel India Ltd. set the bourses abuzz, with its stock hitting the 20% upper circuit after the company unveiled a major restructuring scheme. The plan includes the merger of Anchemco India Pvt. Ltd. into Asia Investments Pvt. Ltd. (AIPL), followed by the demerger of AIPL’s auto-related undertakings into Gabriel India.
The move aligns with Gabriel’s ambitious revenue goal of ₹50,000 crore by 2030 and aims to simplify group structure, expand product lines, and boost scale all without taking on debt. Post-restructuring, Gabriel India will issue 1,158 shares to AIPL promoters for every 1,000 shares held.
The scheme, set to be implemented between April 2025 and April 2026, still awaits regulatory clearances from NCLT, stock exchanges, shareholders, and creditors. The plan also covers investments in Dana Anand, Henkel Anand, and ACYM ventures that will now come under Gabriel India’s fold.
The company emphasized that the consolidation will help clarify its diversification strategy and strengthen its position both domestically and internationally. This strategic clarity fueled investor enthusiasm, adding to the stock's 20% gain over the past week.
Dixon Technologies also entered the spotlight but for less celebratory reasons. Global brokerage Morgan Stanley downgraded the stock to ‘Underweight’, even as it raised the target price to ₹11,563 from ₹8,696. Despite the revised target, the brokerage forecasts a 23% downside from Monday’s closing price of ₹14,951.20.
The downgrade stems from expectations of increased competition in Dixon’s core EMS (Electronics Manufacturing Services) business after the expiration of the government’s Production Linked Incentive (PLI) scheme in FY26. Morgan Stanley also anticipates an earnings slowdown of 46% during FY25-FY27 and 18% during FY27-FY30.
Adding to the pressure, Dixon's largest client Motorola has reportedly begun outsourcing 25% of its volumes to Karbonn in recent months, a figure expected to rise to 35% by June. Longcheer, another key client, has also started shifting a small share of production to Karbonn.
Despite strategic collaborations in the pipeline, regulatory delays have hindered Dixon’s ability to stem the competitive tide. Furthermore, sluggish demand in its IT hardware vertical blamed on import-friendly government policies has weighed on near-term prospects.
Out of 33 analysts covering the stock, 10 now recommend a 'Sell', a growing minority amid shifting client loyalties and increasing peer competition. Dixon shares, though up 3.26% on Monday, are still down 17% year-to-date.
Tuesday’s market developments reflect the complexity of India Inc.’s mid-year landscape. Where Gabriel India’s transformation plan captured investor imagination, Karnataka Bank’s governance issues and Dixon’s shrinking EMS moat cast shadows. These shifts underscore how leadership stability, strategic clarity, and evolving industry dynamics remain critical for investor confidence in the second half of 2025.