Tale of the Tape 

Good evening.

Nifty and Sensex closed with minor gains; +0.2% each. Midcaps (+1.9%) and Smallcaps (+1.1%) recovered from yesterday’s fall. The advance-decline ratio was in favour of the bulls (3:2).

Except Oil & Gas (-0.5%), all other sectors ended flat or in the green. IT (+1.8%), Pharma (+1.4%) and Real Estate (+1%) saw the most buying.

Has HUL bottomed out or is the recent correction set to continue? Read our top story for all the deets.

UltraTech Cement (+7%) Q3 results beat Street estimates. Meanwhile, Coforge jumped +12% on a strong Q3 show. More details below.

Go Digit, Paras Defence and Pidilite all saw big moves today. Check out their charts below to find out why.

PB Fintech gained +5%. Global brokerage firm Citi sees a further +18% upside from current levels.

Listing gains. Stallion India Fluorochemicals closed at Rs 126 p/sh; +40% from its IPO price. 

Maruti will increase car prices starting Feb 1. 

Kalyan Jewellers fell another -2% today; the stock is down -38% so far in January. 

NMDC rose +4% after the Karnataka Governor deferred the new Mineral Bill after the mining industry raised concerns. 

Q3 reactions. Persistent Systems (+10%) soared after reporting a +30% YoY bump in profit. BPCL dipped -2% after its results missed Street estimates and analysts flagged issues with Russian oil supplies.

Mazagon Dock Shipbuilders rallied +6% intraday after it confirmed the Defence Ministry was moving ahead with a massive submarine project.

Here are the closing prints:

Stock
Deep F*#&ing Value!

Hindustan Unilever is down -23% from its all-time highs! It’s been a rough year for the FMCG giant, with weak urban demand taking a big toll. What we want to know: is the worst behind it or is there more pain ahead? 

Let’s start with the bad stuff first. In Q3, HUL saw flat volume growth (due to a fall in soap & tea sales) and a dip in EBITDA margins (despite price hikes & lower marketing spends). Demand will not improve in Q4 either, which is why the stock got a bunch of target price cuts today.

That said, there are positive triggers at play:

• The Budget is just two weeks away. Most reports say the GOI wll cut tax rates and boost urban consumption, which will be a big W (if it happens).

• The Kwality Walls demerger is FINALLY happening too. Ice cream makes up less than 5% of HUL’s topline, but requires a lot of cold storage investment. It’s better for both businesses to have separate operations, which should unlock value!

• Premium segments are still doing well. FYI - this is why HUL announced it was acquiring D2C skincare brand Minimalist for Rs 2,955 cr. This could be a HUGE growth boost  -- and allow it to tap into younger customers.

• Valuations: HUL is trading below its five-year average of 54 times forward earnings. Yes, there are some who argue for more correction, but if you believe in HUL long-term, it’s comparatively cheap right now! 

TL;DR: Demand sucks and there will almost certainly be a little more short-term pain. But HUL could be close to bottoming out.

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