Tale of the Tape 

Hola Amigos. Markets continued to bleed!

Nifty (-1.4%) and Sensex (-1.3%) just kept falling and ended near the day’s low. FYI - the Nifty is now down -10% from its September highs. Are we entering the correction zone? Midcaps (-2.7%) and Smallcaps (-2.9%) got absolutely thrashed. A whopping 472 stocks in the NSE 500 ended in the red. Check out the Stocktwits Sentiment Meter:

Not a single sector ended in the green. Real Estate (-3.2%), PSU Banks (-3.1%) and Metals (-2.7%) were the top losers.

Swiggy defied broader market weakness with a solid-ass debut. Read our top story on the company’s bull vs bear case with target prices from JM Financial and Macquarie!

Sula Vineyards cracked over -6% on bad Q2 numbers. On the flipside, KNR Construction was the top NSE 500 gainer after a blockbuster Q2 show. More details below.

Inflation hit a scary high in October, dashing hopes of a rate cut. Meanwhile, Zinka Logistics IPO kicked off today. Read our analysis below to help you decipher both developments.

PNB Housing Finance cracked -7% after 2.5 cr shares (9.5% equity) changed hands in a big block deal; reports say Quality Investment HOldings was the likely seller.

Exide Industries (-3%) was in focus after Nomura downgraded the stock, citing declining lithium cell prices & slower EV adoption rates.

Hero MotoCorp (-4%) was the top Nifty loser, falling the most in two years, ahead of its Q2 earnings.

Results reaction. MedPlus (+3%) gained after posting a +1.5x rise in Q2 profit. Nykaa (-3%) gave up initial gains despite a strong Q2 show.

Acme Solar Holdings had an awful market debut, closing -12% lower than its IPO price of Rs 289 p/sh.

Here are the closing prints:

Stock
Swiggy: Bull vs Bear Case

Swiggy surprised markets today with a blockbuster debut! The stock ended 18% higher than its issue price of Rs 390 p/sh. FYI - profitability concerns & broader market weakness had driven down the GMP before the listing. But it’s clear that many believe in its future. Before you decide to invest, here’s a quick bull vs bear take on Swiggy.

First up, the bulls. The case here is that quick commerce will grow big enough (some estimates say a CAGR of +50% between FY24 and FY29) that it won’t be a winner-takes-all market. On top of this, there are only 3 platforms that appear to have cracked the execution formula, which means the pie is MORE than enough to support profitability. FYI - JM Financial notes that Swiggy’s quick commerce execution also saw some speed bumps due to leadership issues. A management revamp at Instamart could be the next key positive trigger to help take things to the next level. Fun fact: the stock nearly hit JM Financial’s Rs 470 p/sh target in intraday trading today. 

Next, let’s have the bears. The narrative here is obvious: Swiggy lags behind Zomato on every single metric from gross order value to monthly transacting users. Analysts estimate Swiggy is about 4-6 quarters behind Zomato on food delivery & quick commerce. Macquarie also believes that the road to profitability is “long” and “winding”, projecting group EBIT breakeven only by FY28. And worst of all, Macquarie says quick commerce itself has unsustainable economic profit. PS - they have an underperform rating and a target price of Rs 325 p/sh; -30% from current levels.

Big Picture: It’s about baby steps at first. Swiggy needs to turn EBITDA positive while gaining market share. Posting sustainable profits while catching up to Zomato. Then there’s the long-term picture. Will India’s affluent customer base be big enough to make quick commerce profitable for all? That’s what you’ll have to bet on.

Stocktwits Specials
ST India Momentum Index 🚀 

Here’s a quick yet detailed look at the Stocktwits India Momentum Index—tracking the top 10 Nifty 500 stocks based on yearly returns. In about 5 minutes, we’ll walk you through the top 3 momentum stocks and share trade setups from SEBI RAs on Stocktwits for each.