Tale of the Tape 

Hola Amigos. Happy Friday!

Nifty and Sensex rallied +1.7% each to end the week in the green. Midcaps (+2%) and Smallcaps (+1.9%) had a great day too. 414 stocks in the NSE 500 closed higher!

Not a single sector ended in the red. IT (+2.9%), Real Estate (+2.5%) and Metals (+1.7%) were the top gainers.

Ola Electric has gone bonkers after its IPO. Read our top story below on why the hype is justified but you should also exercise caution.

Glenmark Pharma (+5%) gained after a solid Q1. Meanwhile, Pitti Engineering hit a record high on its Q1 profit jump. More details below.

Brokerage upgrades. Bharti Airtel (+1%) was in focus after Macquarie initiated coverage on the stock. Meanwhile, DLF jumped +5% after JP Morgan hiked the price target to Rs 1,000 p/sh; +15% from current levels.

Hindustan Zinc cracked -9% as Vedanta plans a bigger stake sale—3.17% instead of 2.6%! 

Results reaction. Polyplex soared +9% after solid Q1 results that saw it return to profits. RHI Magnesita India (+5%) gained after posting its highest-ever Q1 EBITDA.

Aurobindo Pharma (-2%) slipped after the USFDA issued a warning letter to its Eugia unit-III in Telangana.

Suprajit Engineering jumped +16% after announcing a share buyback at a +39% premium to its previous closing price.

CDSL (+10%) hit a 52-week-high ahead of the record date (August 24) for its bonus issue.

Electronics Mart was in focus after 3.1 cr shares (~8% equity) changed hands in a block deal; the buyers and sellers were not immediately known.

Here are the closing prints:

Stock
Only OLA!

Ola Electric is on fire! The stock is up +74% since its IPO last week, which is INSANE. For those having major FOMO, we don’t blame you. But WTF is going on here and is it too late to join the party? Here’s what you need to know.

In the last week, Ola has seen three big triggers. Firstly, there’s some encouraging signs in its Q1 numbers. The company’s sales doubled YoY to 1.25 lakh units. Its automotive segment EBITDA margins are close to breakeven. FYI - this is big because it happened even though GOI subsidies were reduced over the last year.

Secondly, it also announced plans to launch three electric motorbikes, starting from Rs 74,999 to Rs 1.99 lakh. Morgan Stanley says this means Ola will address both “mass and premium”segments. The aggressive pricing at the lower end should be able to convince bike riders, who make up over 60% of 2-wheeler sales, to jump ship.

FYI - founder Bhavish Aggarwal also announced that its new locally made battery cell will be used by April 2025. Cells make up ~35% of an EV two-wheeler’s cost. By making and using their own cells, Ola should be able to eliminate the 30% margin charged by external suppliers for lithium cells. This is a big boost towards profitability.

Finally, HSBC initiated coverage on the stock today, Ola Electric’s first buy rating! HSBC is bullish about the firm’s battery venture and notes that regulatory support should help carry the company through bad patches.

Big Picture: There’s a lot going for Ola right now. But remember, the company is still in the red. Its Q1 net loss widened to Rs 376 cr (vs 267 cr). The crazy rally has also given it eye-watering valuations. FYI - HSBC’s target price of Rs 140 p/sh isn’t too far from current levels. Experts say it's unclear how much more room there is to grow even after taking in account all future growth potential! Lets see how this goes.

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Earnings
Earnings Roundup

Glenmark Pharmaceuticals (+5%) posted a solid set of Q1 results! Strong double-digit growth in its European & Indian markets helped bump up the topline. Even its North American vertical was up +3% QoQ, which is decent considering its still recovering. Drug pricing pressures also eased off, which helped boost margins and amp up the bottomline!

The company joins a group of smaller pharma firms that have KILLED it in Q1. FYI - it also has key product launches lined up for FY25 including an acne cream and a new cancer drug.

Here are its Q1 stats:

• Revenue: Rs 3,244 cr; +7% YoY

• EBITDA: Rs 588 cr; +34% YoY

• EBITDA Margin: 18.1% vs 14.4% YoY

• PAT: Rs 340 cr; +2x

Glenmark Pharmaceuticals is +83% YTD. 

Pitti Engineering (+4%) hit a record high after reporting great Q1 results. Sales of its core rotating electrical equipment jumped 25% YoY, its highest-ever quarterly growth! FYI - its EBITDA per tonne also saw a small bump of +3% YoY. This, combined with the topline jump, helped boost the bottomline and also let it report its highest-ever quarterly EBITDA.

PS - The company also announced that its recent capex work will be done by Sept 2024, after which its installed capacity will rise +22% to 90,000 MTPA.

Here is its Q1 report card:

• Revenue: Rs 387 cr; +33% YoY

• EBITDA: Rs 56 cr; +33% YoY

• PAT: Rs 21 cr; +47% YoY

Pitti Engineering is up +90% YTD.

Charts

Movers and Shakers

Here’s a look at this week’s top NSE500 movers. Inox Wind took the pole position after rallying +22%. Kaynes Technology (+19%) hit a new all-time high. Aarti Industries tanked -19% after the company withdrew its full year FY25 guidance. Hindustan Zinc fell -12% on promoter stake sale reports. Check out their charts below:

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