Tale of the Tape 

Hiya everyone. Happy Friday! 🍻

Nifty (+0.3%) and Sensex (+0.2%) closed up for the 4th time in the last 5 weeks. Midcaps (+1%) and Smallcaps (+0.8%) had a great day. The advance-decline ratio ended in favour of the bulls (3:2). 📈

Except for IT (-0.9%), all sectors ended in the green. Auto (+1.3%) and Real Estate (+0.8%) were the top winners. ⭐

Adani’s Ambuja Cements has scooped up yet another cement maker. Read our top story to see how it will affect all cement stocks. 🔍

What are the biggest takeaways from Charlie Munger’s journey? Check out his biggest insights below, courtesy of DSP Netra. 💯

LIC was up +6% after reports said it would enter the health insurance biz through acquisitions. 🔥

Vodafone Idea jumped +4% after reports said it would sell its entire stake in Indus to repay debt. 💰

Mahindra & Mahindra (+2%) was the top Nifty gainer, beating Tata Motors to become India’s second most valuable automaker. 🚗

Adani Ports (+2%) was in focus after Kotak hiked its target price on the stock to Rs 1,650 p/sh; a +15% upside from current levels. 👍

GMR Airports Infrastructure (+2%) was in focus after Jefferies added it to their India portfolio. ✅

Here are the closing prints: 

Stock
Ambuja-Penna Cement: $1.25 billion Deal

Ambuja Cement (+2%) is back in the spotlight with its BIG acquisition of Penna Cement Industries for Rs 10,442 cr. Whew. ICYMI - this is the second big deal by the Adani Group after it bought Sanghi Industries last year. Here’s a quick guide on what it means for Ambuja and India’s cement sector. 🔍

First off, most analysts agree the deal is cheap, value-accretive (aka profit boosting from Day 1) and strategic. Yes, Ambuja likely got a good bargain because the promoters of Penna had been struggling with liquidity issues. Overall, a big positive. 👍

Secondly, the deal will take the Adani Group’s cement capacity to 89 mtpa vs 75 mpta earlier. It does this by specifically expanding Ambuja’s presence in South India. FYI - 90% of Penna’s capacity is in Andhra Pradesh and Telangana. So the deal will DOUBLE Ambuja’s southern market share from 10% to 20%! 📊

That said, this doesn’t upset the cement sector’s overall pecking order just yet. Aditya Birla’s UltraTech is still on top with a capacity of 153 mpta! But, the acquisition is in line with overall consolidation in the sector. Fun fact: the market share of India’s top 5 cement firms has jumped from 45% in March 2015 to 54% in December 2023. 💪

That’s why this deal is bad news for regional players like India Cements, Sagar Cement, KCP and even bigger players like Ramco or Dalmia who have exposure to South India. Competition will intensify, especially because demand is up and input costs like power have gone down. All players likely have the appetite to strike at their rivals and draw blood. At the same time, for some of the smaller players, this also means they could become good takeover targets if their promoter doesn’t mind handing over the reins! Watch this space. 🔥

Market

Remembering Charlie Munger ft. DSP Netra

Hi guys. Last month was the first Berkshire Hathaway AGM that didn’t have Charlie Munger. Luckily for us though, Munger’s wisdom still lives on. So, in honour of that, we’re taking a look at the top takeaways from his journey, courtesy of the folks at DSP Netra: 💯

1) Drawdowns: “If you’re going to be in this game… you better be able to handle a 50% decline”. It may seem silly talking about this in the current bull market, but eventually, we will see a downswing. FYI - all the top 10 listed companies in India have seen drawdowns of 50% or HIGHER in the last 30 years. This includes RIL (-68%; Jan 2008-Oct 2008), Bharti Airtel (-57%; Oct 2007 - Aug 2012), Larsen & Toubro(-77%; Jan 2000 - Sept 2001) and TCS (-66%; Jan 2007 - March 2009). So get your stomach ready for whenever it happens again. 👀

2) Consistency: “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” While waiting for the next dip and momentum investing are cool, there’s a LOT of money to be made by simply investing consistently and over a long period of time. Fun fact: Real SIP returns over the last 30 years are the HIGHEST in India compared to all major markets including China and the US. Also, buy & hold investors on average outperform the buy & sell investors by 2.5% CAGR! 🤑

3) Beating the market:  “With unrealistic expectations, you’re going to be miserable.” Retail investors tend to make bets on past performance. See: the fascination with Quant or Parag Parikh right now. The truth is that everyone has underperformance. FYI - It’s no surprise that only 38 out of 151 active equity funds have outperformed the major indices over a long period. But even these funds have seen MAJOR volatility in that journey, going from top quartile to falling below average in the span of a couple years. So don’t always chase the next best thing based on last year’s performance! 🚀

​​For more details, check out the full report here: https://dspim.co/NetSWNLJu 

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Charts

Movers and Shakers

Here’s a look at this week’s top NSE500 movers. Chemplast Sanmar took the pole position after rallying ~27% 🥇 Home First Finance shot up +25% to hit a new all-time high. IRB Infra (-13%) saw profit booking after last week’s massive move. PNC Infra cracked -10% after CBI raided the company’s offices. 📉 Check out their charts below:

Links That Don’t Suck

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🤔 Robbing Peter to pay Paul? Uday Kotak on Vodafone Idea's deal with Nokia and Ericsson

⚽ Euro 2024 predictions: Best player, dark horses, biggest disappointment? 

😋 Aamras Tops Global List Of 'Best Dishes With Mango' By Taste Atlas

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