Tale of the Tape 

Howdy folks! Markets snapped their six day losing streak.

Nifty (+0.9%) and Sensex (+0.7%) were up big after a lower-than-expected China stimulus + the BJP’s win in Haryana perked up investors. Midcaps (+2.2) and Smallcaps (+2.1%) also popped off. 415 stocks in the NSE 500 ended higher.

Except Metals (-0.9%), all other sectors ended in the green. Auto (+1.7%) and Energy (+1.6%) were the top winners.

IPCA Labs recently hit an ATH. What’s driving its big rally? Read the first in our series on stocks that have seen big gains on solid fundamentals.

Genus Power was locked in a +5% upper circuit. Meanwhile, NMDC fell -4%. More details below.

Paytm soared +16%, its best single-day gain since Feb 2023! PS - SEBI RA Mayank Gupta sees the stock at Rs 780 - 860 p/sh levels in the next two months. 

Trent (+8%) was the top Nifty gainer after a bunch of launches, including a new Zudio beauty store format & a lab-grown diamond brand.

Brokerage reactions. Mahindra & Mahindra (+4%) gained after CLSA upgraded the stock; it sees a +7% upside from current levels. JSW Energy jumped +7% after Nomura initiated coverage; it sees a +22% upside from today’s close.

Vodafone Idea (+4%) clarified it was in talks with the GOI for removal of some bank guarantee requirements.

SpiceJet gained +9% after it said it would induct 10 new aircraft into its fleet by November-end.

Here are the closing prints:

Stock
Pink Of Health

Hey guys, with markets being a little nervous lately, we’re going to be taking a look at stocks that recently hit all-time highs! And more importantly, how their fundamental story is driving their gains. First up is IPCA Laboratories which has jumped +36% since its July lows. Let’s get into it.

For the unaware: the mid-sized pharma firm has been known for its anti-malarials. But IPCA shot into the global spotlight during Covid for its supply of hydroxychloroquine API ingredients. This laid the groundwork for future growth because the US govt lifted the import ban it had imposed in 2017! 

What’s popping? There are three big triggers here, two current developments and one forward-looking. 

The first is solid growth in domestic formulations biz. IPCA has always been a major domestic player, with Indian formulations growing 12% YoY vs industry average of less than 9%. ICYMI - the company’s Q1 FY25 earnings beat Street estimates because its domestic segment helped lift up weaker exports & API verticals. Pain meds have been a big booming market for IPCA.

Secondly, its acquisition of Unichem was widely criticized in 2023 for moving its focus towards exports and the EU & US markets. But Unichem bounced back and had a great H2FY24. After a BUNCH of regulatory issues, Unichem is now paving the way for IPCA to properly tap the US market for growth. FYI - IPCA has projected consolidated US revenue of $200 million by 2025 end vs just ~150 million now.

Finally, this is part of IPCA’s plan to get back into contract drug manufacturing. It’s investing big time here in biologics and restructuring its US formulations vertical (integrating Bayshore into Unichem) to chase growth.

TL;DR: Within a broader sector, there are always unique individual stories! For IPCA, its core domestic cash cow + a return to exports have triggered a big rally. FYI - Nomura believes there’s more upside ahead, with a target price of Rs 1,750 p/sh; +14% from current levels.

Stocktwits Specials
Buy The Dip In Railway Stocks?

Railway stocks have been the darlings of Dalal Street. But, after a sharp correction in recent months investors are staring at large portfolio drawdowns. Is it time to book profits or should you add more at current levels? Find out in our latest video below