Tale of the Tape 

Hiya everyone. Markets ended in the green on FY24’s last trading day! 📈

Nifty and Sensex were up +0.9% each, despite a sharp last-hour dip that knocked them off their highs. Midcaps (+0.5%) joined the fun, but Smallcaps ended flat. The advance-decline ratio was in favour of the bulls (3:2). 💪

All sectors ended in the green. PSU Banks (+2.6%), Auto (+1.3%), Metals (+1.2%) and Pharma (+1.2%) saw the most buying. 🔥

After a weak 2021-2023 performance, Is D-Mart set for a major re-rating? Read our top story below to find out why. 💯

Maruti Suzuki has been tearing up the roads. More details below on the stock’s recent positive triggers. 🚗

Bajaj Finserv (+4%) was the top Nifty gainer after reports said its housing finance arm was preparing for an IPO. 👀

IDFC First Bank (-3%) fell after 18.3 cr shares, or 2.6% equity, changed hands in a block deal; PE firm Cloverdell Investment was the likely seller. 🤝

Ambuja Cement (+2%) gained after Gautam Adani infused Rs 6,661 cr to raise his stake to 66.7% (vs 63% earlier). 💰

Aegis Logistics (+13%) was the top gainer on NSE500. IIFL Securities sees a further +14% upside from current levels. 🤑

VIP Industries rallied +12% on bullish management commentary. ✅ 

PCBL rallied +5% intraday after its promoters agreed to infuse Rs 448 cr in the company. 👍

BHEL (+2%) won a Rs 4,000 cr order from Adani Power. ⚡

ICICI Securities (-1%) was in focus after its shareholders approved its delisting proposal. 😣

Alkem Laboratories fell -3% intraday after getting 10 observations from the USFDA for its Baddi plant. 🚨

Here are the closing prints: 

Stock
Switching Gears

Maruti Suzuki has been ZOOMING. The stock is up +13% in the last month, beating the Nifty AND Nifty Auto Index. It also shot past milestones like it’s nothing: crossing the Rs 12,000 p/sh-mark and becoming the first automaker to hit the Rs 4 lakh cr market cap mark. So what’s going on here? 🚗

1) SUV pivot: The company has DOUBLED its SUV market share from 10% in 2022 to 23% at the end of 2023. This is a crazy jump for the king of cheap hatchback cars. In November 2023, 53% of its total sales came from SUVs, showing that it has successfully been able to jump on the trend for bigger and more expensive cars. This came just in time because sales of small hatchbacks and sedans hit new lows in H2 2023. 📊

2) Green cars: Maruti’s approach has been a little different. It bet big on CNG cars and that’s largely paid off. FYI - CNG volumes jumped from 106k units in FY20 to a projected 545k units by FY24-end. That said, EV is obviously something they are working on. Their first electric car is set to come out in FY25, which will hopefully challenge Tata Motor’s dominance. ♻️ 

3) Suzuki’s Gujarat plant: Last year, Maruti bought out Suzuki Motor Gujarat (SMG), which was run by its parent firm. FYI - SMG makes up about 40% of Maruti’s total cars in India. This was a partnership that began way back in 2014. Changing it at that time left some experts puzzled. But in hindsight, it makes more sense. If Maruti is set to enter the EV race and beat Mahindra in the SUV market, it would be wise to have production, supply and engineering all under one management. 😎

Looks like retail bros are also digging the stock with the Stocktwits Sentiment Meter in the “bullish” territory.

Specials

Should You Buy HDFC Bank?

It's no surprise that HDFC Bank has been one of the biggest underperformers in recent years. But, is the worst priced in or is the more pain in the offing? We try to decode this in our recent video where we analyze the company’s fundamentals, technicals, brokerage view and SEBI RAs target.

Stock

Everyone Loves DMart

Avenue Supermarts (+3%) is back in the spotlight after back-to-back brokerage upgrades this week! ICYMI - the stock hasn’t been the darling it once was and is STILL down -17% from its October 2021 highs. But is it time for a rerating? Let’s take a look. 🧐

For the unaware: Avenue, which runs the D-Mart retail chain, was hit by a double whammy after the pandemic. The first was a rise in inflation in 2022, which hit overall discretionary spending. The second was competition from Trent and Reliance Trends in the apparel segment. FYI - general merchandise & apparel accounted for ~30% of D-Mart’s FY19 revenue which is down to 23% in FY23. A drop that is taking a long time to recover. Naturally, all of this took a toll on margins & revenue as well. 👎

So what’s changed? For starters, this snowballing decline has stopped in FY24. After five STRAIGHT quarters of a drop in gross margins, the company reported an improvement in Q3FY24! Festive season sales were also good and inflation is mostly under control. With things stable now, there is room for D-Mart to hike prices if crude + palm oil prices go up. 💰

Another trigger has been that D Mart’s strategy of opening bigger stories in the last 5 years is starting to pay off. Sales per sq ft are improving as economies of scale pick up. Its ‘cluster’ store strategy of opening more outlets in a densely packed area is a key monitorable. For the upcoming months, Q4 is typically its strongest quarter and store additions also pick up in the second half of a calendar year. 🛒

Finally, the reason every brokerage (CLSA, Macquarie, ICICI Securities) has cited is that of valuations. By any metric, D Mart was grossly overvalued. Two years ago, its premium over Nestle was 50%, which was INSANE! It’s now finally at a place where you don’t feel bad about buying it. FYI - CLSA has a target price of Rs 5,307 p/sh: +19% from current levels! 🤑

Stocktwits Spotlight

Chemical stocks are showing early signs of bottoming out. CravingAlpha aka Mayank Mehra’s top pick from the space is PI Industries. Its technical chart structure indicates a breakout to fresh all-time highs is on the cards. In the next 3 months the stock can give ~10% returns with a strict SL of Rs 3,600. 

Follow Mayank for more awesome trading insights and add $PIIND.NSE to your watchlist and track the latest from the community.

Links That Don’t Suck

💯 Should You Buy HDFC Bank? | HDFC Bank Share | HDFC Bank Share Latest News 

🚀 The S&P 500 Is Poised for Best Start to Year Since 2019 

🤖 Inside the Creation of the World’s Most Powerful Open Source AI Model 

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🙏 SRH vs MI | 40 overs, 523 runs, 38 sixes!

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