Tale of the Tape 

Happy Weekend everyone!

Markets rallied over +2% today to end the week in the green. All’s well that ends! Short covering in Index heavyweights, exit polls suggesting a comfortable win for BJP in Maharashtra and positive global cues triggered all round buying. Midcaps (+1.1%) and Smallcaps (+0.9%) also moved up. The advance-decline ratio (4:1) was firmly in favour of the bulls. 

We had a green wave across the screen. Not a single sector closed in the red. IT (+3.3%), Real Estate (+3.2%) and PSU Banks (+3%) were up big time. 

Paytm has +2x in the past 6 months and has outperformed both the Midcap and Smallcap Index in 2024! What’s fuelling the rally? Read more below. 

Enviro Infra Engineers’ Rs 650 cr IPO is open for subscription. Check out our detailed analysis below. 

Adani Group stocks were volatile AF! Ambuja (+4%) and ACC (+3%) closed in the green as investors bought the dip. Meanwhile, Adani Green (-8%) and Adani Energy Solution (-7%) continued to bleed. 

Godrej Properties rallied +6% intraday. Global brokerage firm Bank of America sees a further +25% upside from current levels. 

Protean E-Gov fell -6% after NSE Investments sold their 20% stake via OFS.

Ola Electric (+3%) will lay off 500 employees as part of its cost cutting efforts, according to reports. 

VIP Industries (+2%) extended its winning streak on stake sale buzz. 

Listing pain. Zinka Logistics closed at Rs 260 p/sh; -5% from its IPO price.

Corporate action. Wipro announced Dec 3 as the record date for its 1:1 bonus issue. Kitex Garments (-5%) approved a 2:1 bonus issue. Shareholders will receive 2 bonus shares for every share held. 

MGL (+3%) increased CNG prices in Mumbai by Rs 2 p/kg to Rs 77 p/kg.

Here are the closing prints:

Stock
Paytm Is On Fire!

Paytm of all stocks has turned out to be the unlikely saviour in this recent market volatility. Don’t believe us? Check this out. Paytm is up +60% in the last 3 months vs a -5% drop for Nifty. In fact, the stock has more than doubled in the past 6 months and has outperformed both the Midcap and Smallcap Index in calendar year 2024! I know what you’re thinking: WTF! is going on here? 

For starters, its business ops are starting to recover after a near death blow by the Reserve Bank of India earlier this year. ICYMI - The RBI banned Paytm Payment Bank from carrying out banking operations post 29 Feb. RBI said that its external audit revealed “persistent non-compliance and continued material supervisory concerns”. In plain English: Paytm’s security and legal governance behind the scenes SUCKED.

Since the RBI order, Paytm has been busy fixing its sh!t. Merchant GMV is back to 96% of pre-crisis levels, and consumer GMV has recovered to 88%, despite wallet disruptions. We simply can't downplay how INSANE this is.

Going forward, the management is confident about a boost in merchant onboarding and GMV growth during the festive season in Q3. PS - They are also hopeful of receiving the aggregator licence which would pave the way for onboarding new, large online merchants. Additionally, Paytm has already received approval from NPCI to add new UPI users, which is great news for rebuilding its user base. Selling its non-core movie ticketing business to Zomato for Rs 1,345 cr also reduced its overall cost burden. This in turn opens the possibility of turning profitable sooner rather than later. 

The RBI ruling of February would’ve basically KILLED any other company. Experts are hopeful that VSS and team would’ve learnt their lessons and be “good boys” in the future. The remarkable turnaround along with attractive valuations further increases Paytm’s appeal. PS - Bernstein has a 12-month target price of Rs 1,000 p/sh; +12% from current levels.

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