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- Defense Stocks Are ♥️
Defense Stocks Are ♥️
Yash Upadhyaya
July 04, 2024
Tale of the Tape
Good evening boys and gals. 😎
Markets cooled off after opening higher to end near the day’s low. Midcaps (+0.6%) and Smallcaps (+0.5%) fared much better. The advance-decline ratio was split evenly. 🤼
Most sectors ended in the green. Pharma (+1.4%) and IT (+1.1%) were the stars of the show followed by Autos (+0.7%) and Real Estate (+0.5%). FMCG (-0.2%) continued to underperform. 📉
After an explosive 2022-23, is ITC’s market run over? Read our top story below. 🧐
Lupin rallied +7% following a DOUBLE UPGRADE by Kotak Institutional Equities. On the other hand, ITD Cementation tanked 16% on promoter stake sale buzz. More details below. 🚨
Ultratech Cement is in talks to acquire Orient Cement, according to ET. 🚧
Wipro snapped its five-day gaining streak. Global brokerage firm Citi sees a -15% downside from current levels. 👎
Mazagon Dock Shipbuilders (+19%) was the top gainer on NSE500. The company’s market cap crossed the Rs 1 lakh crore mark for the first time!
Persistent Systems acquired US-based enterprise communication platform, Starfish Associates, for $20.7 million. 🤖
Inox Wind rallied +10% after raising Rs 900 cr from the promoters; also turned net debt-free post the fund infusion. 📊
Here are the closing prints:
Nifty | 24,302 | +0.1% |
Sensex | 80,050 | +0.1% |
Bank Nifty | 53,104 | FLAT |
Stock
ITC: 400 is the new 200
What’s wrong with ITC? After more than doubling between 2022 and 2023, the stock is down 10% over the last 6 months. Potential multibagger or boring compounder from here on out? Here’s what will decide its future. 🔮
For starters, its earnings growth hasn’t been that impressive. In FY24, the company’s sales were down -1% YoY while most FMCG peers reported healthy growth. Its core cigarette business is doing okay. But, there’s only so much it can grow before it hits a ceiling. Also, a large part of this growth comes from the stability of the government's taxation policy. Perhaps, this is the market’s way of warning us of a potential shock? We’re gonna have to wait till July 20 for anything official. Stake sale by British American Tobacco (BAT) plus the demerger of its hotels business have also done little to lift the stock. 🦥
Perhaps the only silver lining for the company is its FMCG business. As we all know, rural consumption has been under stress for a while. Markets are hopeful that the new government may spend more on populist measures which could boost the rural economy. This is a big positive for the company. ITC's FMCG business has outperformed competitors by targeting categories with low household usage and consumption, creating significant potential for market growth, according to Motilal Oswal. 🔥
TL;DR: There’s nothing fundamentally wrong with ITC. There’s just a lot of question marks over its potential positive triggers. Experts say long-term investors just need to wait it out. FYI – Nuvama has a target price of Rs 535 p/sh; +25% from current levels. 💸
What’s your view on the stock? |
Specials
4 Multibagger Stocks To Buy
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Stock
Bullets From The Day
💊 Lupin rallied +7% intraday after a DOUBLE UPGRADE by Kotak Institutional Equities. Firstly, they bumped up their rating to “Add” (vs Sell earlier) and hiked the target price to Rs 1,805 p/sh. Kotak says Lupin’s US business may continue to outperform and beat the Street’s expectations both this year as well as the next. The launch of Tolvaptan in April 2025 is a huge positive trigger. Competition is also expected to be low even after Lupin’s exclusivity period ends. PS - the stock is on a tear lately and has gained +32% so far this year.
🚨 ITD Cementation sank 16% on the buzz of a promoter stake sale. Italian Thai Development Public Company is reportedly in talks to reduce its holding due to a liquidity crisis. The promoter entity owes +$3 billion and has been running under huge losses for the past several years. On the other hand, ITD Cementation shares have rallied +3x in the past year valuing the promoter stake at roughly Rs 4,500 cr. Make hay while the sun shines.
Stocktwits Spotlight
Target hit alert!!! SEBI RA Aditya Hujband’s bold call on $IREDA.NSE is up ~70%. Back in March, the stock was teetering near a crucial support zone. From 132, IREDA has zoomed to +220 surpassing Aditya’s targets in JUST 3.5 MONTHS. That deserves a huge round of applause. Follow Aditya for more awesome trading insights and add $IREDA.NSE to your watchlist and track the latest from our community.
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