Tale of the Tape 

Happy Friday guys. You’ve earned this one! 

Nifty (-0.9%) and Sensex (-0.8%) closed down for a fourth straight week, its worst losing streak since August 2023. Midcaps (-1.9%) and Smallcaps (-2.2%) got thrashed yet again. 424 stocks in the NSE 500 ended lower.

Except FMCG (+0.9%), all other sectors were red or flat. Oil & Gas (-2.5%), Metals (-2.4%) and PSU Banks (-2.3%) were the top losers.

IndusInd Bank was the top NSE 500 loser after weak AF Q2 results. ITC (+2%) bucked the trend after posting Q2 numbers. More details below.

Afcons Infrastructure IPO kicked off today. Check out our analysis below to help you decide whether to subscribe.

Larsen and Toubro (-3%) dipped after UBS downgraded the stock; the brokerage also cut its target price to Rs 4,000 p/sh vs Rs 4,440 p/sh earlier.

Results reaction. Godrej Consumer (+3%) gained after its Q2 net profit saw a +13% YoY bump. Cyient rallied +7% intraday before giving up some gains after a decent Q2 show.

Waaree Energies IPO allotment details are out. Check out if you’re one of the lucky few here.

Aadhaar Housing Finance was in focus after Mirae Asset initiated coverage; the brokerage sees a +35% upside from current levels.

Dixon Technologies fell -7% on profit-booking after solid Q2 numbers. PS - the company has hiked its FY25 revenue guidance by +33%.

Godrej Properties has secured a 7.5-acre luxury housing plot in Gurgaon’s Golf Course Road. PS - it should generate revenue exceeding Rs 5,500 cr.

Here are the closing prints:

Earnings
Earnings Roundup

ITC’s (+2%) Q2 results were mixed to slightly positive! Cigarette volumes, its core cash cow, came in at +3% YoY which was in line with expectations. Double-digit growth in its agri & hotel segments also helped boost the topline.

On the flipside, its operating margins hit a nearly three-year-low, dropping a whopping -470 bps YoY. The company attributed the fall to excessive rainfall that whipped up commodity inflation, which in turn hurt FMCG consumption. Whew.

Big Picture: ITC has never been a pure-play FMCG player, which is why its topline and bottomline are holding up. Markets are happy because those two metrics mostly beat estimates. But its operating margins tell the real story: FMCG is hurting.

Here are its Q2 stats:

• Revenue: Rs 19,328 cr; +17% YoY (vs Est: Rs 17,710 cr)

• EBITDA: Rs 6,355 cr; +5% YoY (vs Est: Rs 6,375 cr)

• EBITDA Margins: 32.8% vs 36.9% YoY

• PAT: Rs 5,078 cr; +3 YoY (vs Est: 5,050 cr)

ITC is +3% YTD. 

Induslnd Bank (-19%) was the top NSE 500 loser after awful Q2 results. Provisions for loan losses nearly doubled from last year to hit Rs 1,820 cr. Some of this, the management said, was just to be prudent and fortify the balance sheet. 

But the lender’s slippages, aka proportion of good loans turning bad, also jumped +17% QoQ due to microfinance stress. All of this hit the bank’s headline asset quality numbers and also hurt margins. FYI - net interest margins fell to a 12-quarter-low. Yikes.

The only positive note was that decent credit demand across all verticals still resulted in a small bump in lending income. Deposits also grew at a healthy +15% YoY.

Here is its Q2 report card:

• Net Interest Income: Rs 5,347 cr; +5% YoY

• PAT:  Rs 1,331 cr; -40% YoY

• Gross NPA: 2.11% vs 2.02% QoQ

• Net NPA: 0.64% vs 0.6% QoQ

Big Picture: Many private lenders are struggling, especially due to microfinance + credit card stress. But even by that standard, IndusInd Bank is a bit of a stinker. We’ll have to see how this shakes out in upcoming quarters. FYI - JM Financial has slashed its target price to Rs 1,380 p/sh vs Rs 1,900 p/sh earlier.

IndusInd Bank is -35% YTD.

Stocktwits Spotlight
Stocktwits India Momentum Index! 🚀

The Stocktwits India Momentum Index was down -4% today. Holy Sh!t

Except for Oracle Financial Software, not a single stock ended in the green. Dixon Technologies and Motilal Oswal got beat up the most. PS - Epigral and Cochin Shipyard are very close to slipping out!

PS - The Stocktwits India Momentum Index highlights the top 10 performing companies based on their weekly returns. Plus, we bring you tons of exclusive content on the featured stocks including SEBI RA trade ideas, latest news & earnings updates, fundamental and technical insights.