Tale of the Tape 

Howdy folks. Not really a happy Friday! 😣

Nifty (-0.8%) and Sensex (-0.6%) fell after a sharp selloff in heavyweight stocks. Midcaps (-0.3%) and Smallcaps (-0.5%) traded in sync. The advance-decline ratio was in favour of the bears (3:2). 📉

Except for  Pharma (+0.1%), all sectors ended in the red. Real Estate (-1%), Oil & Gas (-1%), and IT (-0.9%) got beat up the most. ❤️‍🩹

Bajaj Finance rallied +7% intraday after the RBI lifted its lending ban. Meanwhile, a mix-up over Cummins India 2024 guidance saw its stock be volatile AF. More details below. 🔍

Coforge was the top NSE 500 loser after a rough Q4. On the other hand, Coal India was the top Nifty gainer after decent Q4 results. More details below. 📊

Ajanta Pharma, MRF and Rane Brake Linings all saw big movements today. Check out their charts below to find out why. 🔥

Yes Bank (-2%)  fell after 63.6 cr shares, or 2.2% equity, changed hands in a block deal; reports claim PE firm Carlyle was the likely seller. 🤝

Sterling & Wilson Renewable Energy was locked in a +5% upper circuit after discharging all obligations under its debt resolution plan. ⚡

KPI Green Energy (+2%) will consider a stock split on May 23. ✂️

Happy Forgings (+2%) gained after winning a multi-year axel component export supply order. 💰

Here are the closing prints: 

Stock
Aaj Ki Taza Khabar

✅ Bajaj Finance rallied +7% intraday after the RBI lifted key lending restrictions against the company! ICYMI - back in November 2023, the regulator asked Bajaj to stop sanctioning & disbursing loans under two lending products: ‘eCOM’ and ‘Insta EMI card’. At the time, the RBI said this was because there were “deficiencies” in the way the NBFC represented these products to customers. The central bank was particularly upset over the “non-issuance” of key fact statements under those loans.

In case you were wondering, the RBI restrictions did take a toll on growth. Bajaj Finance’s new loans grew by a paltry +4% YoY in Q4FY24. So the company managing to fix things in just six months and convincing the RBI to lift the ban is a big W! 

FYI - this whole episode offers a useful lesson to investors who crib about the RBI’s heavy-handed way of dealing with problems. Bajaj was penalised, perhaps harshly. But the management dealt with the problem, corrected the errors and was able to work its way out of the ban. We only hope that others (read: Paytm, Kotak, IIFL) take note and work just as hard!

🤔 Cummins India was volatile AF amidst confusion regarding its 2024 growth guidance. Cummins Global, its parent company, held a con-call earlier today where they shared their outlook for the India business. It appeared as if the company had cut its guidance to -5% to +5% vs flat to +5% earlier and several media houses also reported the news that way.

But as it turns out, that is NOT the case. The company noted: “In India, we project total revenue, including joint ventures, to increase 9% in 2024, primarily driven by strong power generation and on-highway demand, consistent with our prior guidance.” In other words, it still expects industry demand for trucks to be flat to +5% for the rest of 2024! Consequently, the stock recovered over 7% from its intraday low

In a rush to break the news first sometimes journalists forget to pay attention to detail. It’s only human but if you’re caught on the wrong side then markets can be unforgiving.

Specials

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Who doesn't love dividend income? In our recent video, we cover 3 stocks with high dividend yields. Additionally, we also share targets on these stocks as provided by SEBI RAs.

Earnings

Earnings Roundup

Coforge’s (-9%) Q4 results missed Street estimates! Sluggish growth in key markets restricted top line growth to the high single-digits. Pricing pressures took a toll on operating margins. On the brighter side though, the company’s executable order book stands at $1.01 billion for the next 12 months; +17% YoY. FYI - the company also declared an interim dividend of Rs 19 p/sh. 💸

Here is its Q4 report card:

• Revenue: Rs 2,358 cr; +9% YoY (vs Est: Rs 2,395 cr)

• EBITDA: Rs 301 cr

• EBITDA Margin: 19% vs 19.6% YoY

• PAT: Rs 229 cr; +95% YoY 

Big Picture: The results were overall meh, with some misses. What’s got analysts spooked though is a lack of clear FY25 guidance, which implies uncertainty in the short-term. Coforge also announced a MASSIVE acquisition of Cigniti Technologies. While this will help boost its presence in hi-tech + healthcare, experts say it is a HUGE execution risk and may hit profits in the short term. FYI - Jefferies cut its target price to Rs 4,290; implying another -5% fall after today’s ugly cut. 📉

Coforge is +10% over the last year.

Coal India (+5%) Q4 was a mixed bag. Production and offtake were up +8% YoY as plants stocked up in the quarter ahead of a brutal summer season. That said, the PSU miner’s ‘average price realisation’ per tonne came in at Rs 1,697 vs Rs 1,877 last year. This hurt the topline and should’ve hurt the bottomline too. But lower expenses + accounting changes helped boost margins. 📊

Here are its stats:

• Revenue: Rs 37,410 cr; -2% YoY

• EBITDA: Rs 11,338 cr +21% YoY

• EBITDA Margin: 30.3% vs 24.5% YoY

• PAT: Rs 8,640 cr; +26% YoY

Big Picture: The results were decent, but the market gains today were primarily because brokerages still believe in the long-term future of coal in India. Analysts have cut their target prices slightly, reflecting worries over lower e-auction premiums, but still retain a buy call. 👍

Coal India is up +2x over the last year.

Charts

Chartbusters

Sometimes all it takes is one quarter to change a company’s fortunes. Here are three stocks that saw big movements today:

1) Ajanta Pharma: The stock rallied +14% intraday to hit a record high. Yes, its Q4 results were great. But what’s got investors really excited is its INSANE share buyback proposal. The drug maker will buy 10.28 lakh equity shares (or 0.82% of total outstanding shares) at Rs 2,770 p/sh. That represents a 24% premium to Thursday’s close! 🔥

2) MRF: The stock dropped after it reported a nearly 8% YoY decline in Q4 net profit. FYI - tyre companies are having a rough time now as higher raw material prices eat into margins & the bottom line. Even MRF’s Rs 194 p/sh dividend couldn’t cheer up investors today. 🛞

3) Rane Brake Linings: The stock SOARED after a solid Q4 performance.  It reported record sales for the quarter, along with a cool 28% YoY jump in net profit. FYI - it also logged a 19% bump in export sales for Q4; it officially entered the US market with new products for commercial vehicles. 🌎

Check out their charts below:

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