Tale of the Tape 

Hiya everyone.

Nifty and Sensex reversed sharply mid-way through the trading session to end lower -0.7% each as weak global cues continue to dominate the market direction. Midcaps (-0.3%) and Smallcaps (-0.4%) saw minor losses. The advance-decline ratio was in favour of the bears (3:2).

Except for Pharma (+0.4%), all other sectors ended in the red or flat. IT (-1.9%), Metals (-1.7%) and Energy (-1.6%) were the top losers.

BSE (+8%) knocked it outta the park with great Q1 results. PCBL also killed it with a solid Q1 show. More details below.

RBI refused to cut rates once again, but offered up some insights on global growth & how it sees inflation in India. Read our story below to understand what’s going on.

Tata Motors, Balaji Amines and Lemon Tree Hotels saw big movements today. Check out their charts below to find out why.

Results reaction. BASF India jumped +9% after a solid Q1 show. Meanwhile, Rail Vikas Nigam cracked -5% after its Q1 net profit declined -34% YoY.

Metro Brands rallied +5% intraday after inking a retail pact with American headwear brand New Era Cap.

Protean eGov Tech (-1%) was in focus after 12 lakh shares (3.2%) equity changed hands in a block deal; the buyers and sellers were not immediately known.

Ceigall India had a muted market debut, ending -3% lower than its IPO price of Rs 401 p/sh.

Here are the closing prints:

Earnings
Earnings Roundup

BSE (+9%) was the top NSE 500 gainer after posting blockbuster Q1 results! Transaction charges jumped over +5x YoY to hit Rs 366 cr, that supercharged its topline. PS - this is its highest-ever quarterly revenue. Operating margins also soared by a whopping 14 percentage points YoY, aided by lower-than-expected regulatory expenses.

FYI - while its bottomline technically declined YoY, this was because it reported a one-off exceptional gain of Rs 407 cr in Q1FY24. When you remove that, it's Q1FY25 net profit actually more than TRIPLED YoY.

Here is its Q1 report card:

• Revenue: Rs 608 cr; +181% YoY

• EBITDA: Rs 284 cr; +306% YoY

• EBITDA Margin: 47% vs 33% last year

• PAT: Rs 264 cr vs Rs 440 cr last year

Big Picture: Insane trading volumes, both in equity cash + derivatives, fuelled BSE’s insane growth this quarter. It was also helped by a roll-out of new derivative products last quarter. But the real question is whether this can continue. The SEBI crackdown on F&O is starting and BSE will be hurt the most. We’ll have to wait and watch how this turns out.

BSE is +18% YTD.

PCBL (+5%) reported solid Q1 results! Volumes of its core ‘carbon black’ products were up +25% YoY, led by greater specialty sales + exports. PS - this was its highest-ever sales growth in a single quarter. Operating margins saw a bump due to a higher-margin product mix, which led to a solid bottomline.

Big Picture: The company has been killing it lately, helped by STRONG sector tailwinds. FYI - PCBL has capitalised on European customers shunning carbon black products from Russian producers. Its exports grew +56% YoY. Key triggers to watch out for include capacity expansion at its Mundra and TN facilities.

Here are its Q1 stats:

• Revenue: Rs 2,144 cr; +59% YoY

• EBITDA: Rs 358 cr; +70% YoY

• EBITDA Margin: 16.7% vs 15.6% last quarter

• PAT: Rs 118 cr; +8% YoY

PCBL is +57% YTD.

Economy

RBI Monetary Policy: Key Takeaways

The Reserve Bank of India kept interest rates unchanged at 6.5% for the NINTH time in a row. Yawn! FYI - this was expected, but experts wondered whether the RBI would bowl a googly after recession fears in the US rocked global markets this week. Many central banks, including the Bank of England, have started the rate cut cycle. 

Governor Shaktikanta Das admitted that global monetary policy is “showing signs of divergence” and there are “significant challenges to medium-term global growth outlook”. But he made it clear that for India, inflation remains the key enemy. For the unaware, retail inflation jumped to 5.08% in June, a four-month-high, led by a spike in food prices. 

So yes, we continue to wait. There is a debate to be had over how much the RBI can really do about food inflation, which is a supply-side problem. PS - it’s no coincidence that the GOI reportedly plans to reduce the weightage of food in the consumer price index. But that is a battle for another day.

On growth, the RBI retained its 7.2% GDP forecast and its FY25 inflation forecast of 4.5%. This means, as before, that inflation should dip below 4% between Q2 and Q3, allowing for a rate cut then.

Bottomline: Governor Das appears quite familiar with everyone’s frustration, noting that we need to be “patient to finish the job at hand” and that “the following words of Mahatma Gandhi are highly relevant: ‘The slightest error of judgment, a hasty action or a hasty word may put back the hands of the clock of progress. Policies have, therefore, to be cautiously evolved…”

Charts

Chartbusters

Here are three companies that saw big movements today:

1) Tata Motors gained after rolling out its new Curvv model, starting at Rs 17.5 lakh. Brokerages say it will help the company regain lost EV market share. ICYMI - EV sales have been slowing down and Tata’s own market share has dipped from to 63% in July 2024 vs 70% in July 2023. Jefferies is bullish and has a target price Rs 1,330 p/sh; +27% from current levels.

2) Lemon Tree Hotels was the top NSE 500 loser after its Q1 numbers missed Street estimates. Its bottomline fell -27% YoY on the back of higher expenses. While the overall topline was up, its average occupancy rate fell to 66.6% vs 70.2% last year. The company has a lot of new keys now and is going through growing pains.

3) Balaji Amines cracked -7% after an awful Q1 show. Its topline declined -17% YoY, while the bottomline fell -33% YoY. While volumes were up +5% YoY realisations were badly affected by a drop in raw material prices. Looks like the chemical sector will take more time to bounce back.

Check out their charts below:

Community Star of The Month

Winner Winner Chicken Dinner

Congratulations Ritesh for winning the Community Star of the Month! ⭐

Here are a few investment & trading ideas shared by him on Stocktwits that you must check out: 😎 

• $MONARCH.NSE: https://stocktwits.com/bullconquer021/message/579529907 

• $LICI.NSE: https://stocktwits.com/bullconquer021/message/579152591 

Ritesh is a part-time trader. He entered the markets post-Covid like millions of retail bros. He mostly trades high momentum cash stocks with a short-term swing trade perspective. Follow him: https://stocktwits.com/bullconquer021

Disclaimer: Ritesh is not a SEBI registered advisor and you should not construe any information discussed herein to constitute investment advice. Consult your financial advisor prior to making any actual investment or trading decisions.

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