- The Daily Rip India by Stocktwits
- Posts
- High Higher Highest!
High Higher Highest!
Yash Upadhyaya
April 08, 2024
Tale of the Tape
Good evening y’all. Markets continued to hit new highs! 🚀
Nifty and Sensex rose +0.7% each. Positive global cues + hopes of strong quarterly earnings boosted sentiment. Some last-hour volatility in Midcaps (flat) and Smallcaps (+0.3%) restricted the gains. The advance-decline ratio was split evenly. ✌️
Most sectors ended in the green. Autos (+2.2%) were the stars of the show followed by Real Estate and Energy (both +1.3%). PSU Banks (-0.9%) and IT (-0.5%) stocks saw continued weakness. 📉
As gold prices surge, should you be ditching equities? Also which stocks will gain and lose the most from the yellow metal boom? Read our top story below. 🥇
Bandhan Bank and Wipro both see CEO exits. But one will hurt a lot more than the other. More details below on how the stocks will be impacted. 👀
Exide was the top gainer on the NSE 500 after signing an EV battery deal with Hyundai. Meanwhile, Voltas and InfoEdge were on fire after a strong Q4 biz update. More details below. 📊
Nestle India was under pressure after approving higher royalty payments for the next five years. 💰
GAIL (+5%) hit a new all-time high after a double upgrade by global brokerage firm Morgan Stanley. PS - they have a 12-month target price of Rs 254 p/sh; +25% from current levels! 🤑
Adani Ports (-2%) was in focus after 60 lakh shares changed hands in a major block deal. Buyers and sellers were not known at the time of writing. 🤝
Godrej Properties jumped +8% intraday after its luxury residential project in Gurugram was sold out in just 3 days! 💸
Force Motors (+5%) hit a new all-time high. The company reported a 34% YoY increase in March sales. 🚗
Q4 update reaction. Nykaa (+7%) gained the most in a single day since Nov 17. Signature Global rose +3.5%. ✅
Container Corp cracked -3% on reports that GOI may postpone its Rs 2 lakh crore freight corridor plan. ❌
DOMS Industries (-2%) received notice from the Gujarat Pollution Control Board to shut down one of its industrial units. 🚨
Here are the closing prints:
Nifty | 22,666 | +0.7% |
Sensex | 74,743 | +0.7% |
Bank Nifty | 48,582 | +0.2% |
Market
Gold(en) Rally ✨
Gold prices have been on FIRE lately. The price of the yellow metal was up +9.3% in March, the BIGGEST monthly jump since July 2020. FYI - gold generally glitters when central banks cut rates, but this time around experts say speculative buying + Middle East tensions have also stirred the pot. 🚀
The skyrocketing prices naturally raise two key questions. First, there’s the eternal ‘gold vs equities’ debate. And then, when gold prices hit record highs, who are the big winners or losers in the stock market? Here’s what you need to know. 🤓
First off, there’s no right answer when it comes to gold vs equity exposure. In terms of hard returns, Nifty (with dividends reinvested) is up 19x since 2000, while gold is up 14x in the same period. There may be smaller periods where gold has beaten equities, but the Nifty is the one that glitters in the long term. If you want gold in your portfolio, it should be to hedge against volatility. For example: gold has beaten the Nifty during the 2008 global financial crisis, 2011 US debt ceiling controversy, Covid-19 pandemic and the Russia-Ukraine war. 📈
More importantly though, which stocks will be hit or helped by the rise in gold prices? Well, one clear winner is gold NBFCs like Muthoot Finance or Manappuram Finance. When prices rise, people opt for gold loans because they can borrow more money by pledging the same amount of gold! FYI - both stocks are already up +14% YTD. 🔥
The obvious losers are jewelry companies, which depend on steady gold prices. FYI - Titan said the cost of its raw materials jumped 36% YoY in Q3FY24 which dragged margins + profit. But, it’s not all gloomy, rising prices also help boost demand, especially from people who view it as an investment. 💪
Are you bullish on Gold? |
Specials
Zomato - Buy Now Or Wait For A Dip?
Zomato is on fire! The stock has nearly 4x in the past year to hit a new all-time high of Rs 194 p/sh! But, is it still a buy at current levels or should you wait for a dip?
Check out our latest video where we break down all the key updates on Zomato, covering both fundamental and technical analysis. Also, find out SEBI RAs’ views on the stock. 👇🏻
News
Hitting The Exit Button
Two companies, two CEOS and a lot of confusion. Both Bandhan Bank and Wipro were in the spotlight today after abrupt resignations set off questions over succession and future strategy. But experts say one development is positive, while the other raises a big red flag. 👀
Bandhan Bank cracked 6% after its CEO Chandra Shekhar Ghosh said he would quit at the end of his tenure in July 2024. FYI - the lender had approved to re-appoint Ghosh for another 3 years back in November! So his decision to suddenly retire spooked investors! Ghosh clarified that his exit is a “voluntary” decision but the whole thing does not make sense. Jefferies downgraded the stock after the announcement and cut its target to Rs 170 p/sh; -9% from current levels. Uncertainty around the bank’s leadership position raises major concerns over its future performance, they added. If there's one thing markets don’t like, it’s shoddy succession plans at a bank. 😣
Wipro also reacted negatively to the rumoured firing of long-time CEO Theirry Delaporte. Founder chairman Azim Premji has reportedly been unhappy with Delaporte for quite some time, according to media reports. FYI - in the last two years, TCS, Infosys and HCL Tech have beaten Wipro on BOTH revenue and profitability. Delaporte’s tenure has also seen a huge exodus of internal talent. Over half of the 750 execs ranked general manager or higher have either left or been sacked, which is INSANE. This has largely tied into Delaporte’s strategy of recruiting outside talent to help bring Wipro out of its slump. Unlike in Bandhan’s case, they may turn out to be a positive move, say experts. 😇
Stock
Bullets From The Day
📊 Voltas (+6%) and Info Edge India (+9%) both hit 52-week-high today after posting AWESOME Q4 updates.
Let’s start with the AC maker. Voltas reported an INSANE 72% YoY increase in volumes for Q4. The company said it also hit sales of 2 million AC units for FY24, the HIGHEST-EVER for any AC brand. ICYMI - this scorching volume growth has been helped by many Indian states going through a heatwave. Higher temperatures + more disposable income are a lethal combo for any air conditioning company. To top it off, its home appliance brand also reported a 52% jump in volumes. Overall, a super performance from a stock that had a shaky 2023.
Info Edge (India) was no slacker either. The company reported a double-digit bump in standalone billings to hit Rs 827 cr for Q4. FYI - these sales are particularly lucrative because they don't come bundled with any packaged offering. Margins are also generally higher, which is a positive. Its real estate vertical (99 acres) jumped the most at 26% YoY to hit Rs 131 cr in revenue.
FYI - Citi also upgraded Info Edge to a ‘buy’ from sell earlier. The brokerage now has a new target price of Rs 6,650 p/sh; +7% from current levels.
⚡ Exide Industries (+17%) was the top gainer on the NSE 500 after partnering with Hyundai to produce EV batteries in India! FYI - Hyundai (and its sister brand Kia) plans to localize their EV battery production. They specifically want to focus on LFP (lithium iron phosphate) cells in India as they expand their EV plans.
FYI - the electric vehicle market in India is small, but is heating up. Kia says it plans to roll out locally optimized small-sized EVs in 2025 and Hyundai will invest $2.4 billion to launch six EV models + changing stations by 2028. Exide is currently aiming to produce EV battery cells at the end of this year to cater to both companies.
ICYMI - This news comes as car companies rush to crack the Indian EV market. Tesla will start rolling out cars in India soon (first from Germany, then produced locally). Vietnamese rival VinFast is already building a plant in Tamil Nadu. And then, of course, local big boy Maruti Suzuki will launch its first EV by 2025. There’s a LOT of money to be made here and Exide is cashing in on this big time.
Stocktwits Spotlight
Defence stocks are hot again! Shubham Jain’s top pick, Garden Reach Shipbuilders, has gained +14% in the past week! That deserves a huge round of applause. Follow Shubham for more awesome trading insights and add $GRSE.NSE to your watchlist and track the latest from our community.
Links That Don’t Suck
Get In Touch
Have feedback on The Daily Rip India? Let me know using the poll below or email me (Yash Upadhyaya) at [email protected]!
How did you like today's newsletter? |
Want to sponsor this newsletter and reach hundreds of thousands of passionate investors and traders? Reach us here.
Disclaimer: Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. Read the full terms & conditions here.
