Tale of the Tape 

Good evening ya’ll and welcome back to another week in the markets!

Markets fell for a third straight day as continued heavyweight selling weighed down Nifty (-0.6%) and Sensex (-0.7%). The sell-off was broad-based, with Midcaps (-0.8%) and Smallcaps (-1.3%) seeing even deeper cuts. 

Barring Pharma (+0.4%) and FMCG (+0.3%), every other sector took a hit. Real Estate (-4%) stocks got beaten the most, followed by PSU Banks (-1.2%). Naturally, the overall market breadth was extremely negative, with 373 stocks in the NSE 500 slipping.

In today’s issue of the Daily Rip, we take a look at Kotak Mahindra Bank’s awful Q1, how Cartrade doubled its Q1 net profit, Aditya Infotech’s juicy IPO, TCS’s job cuts, an effectively higher LTCG on Indian family offices, and more.. 

Honourable mentions: SBI Cards cracked -6% after Morgan Stanley downgraded the stock following its weak Q1 results. Amber Enterprises was up +3% after acquiring Israel’s Unitronics for Rs 404 cr.

Check out the NSE500 heatmap:

Earnings
Earnings Roundup

Kotak Mahindra Bank (-7%) got KO-ed after its Q1 results missed Street estimates! The big headline is that provisions more than DOUBLED YoY to Rs 1,208 cr. This was primarily due to stress in its microfinance + retail vehicle portfolios. The lender’s net interest margins also fell more than expected (4.65% in Q1FY26 vs 5.02% in Q1FY25), as it digested the RBI’s rate cuts.

Asset quality also saw mild deterioration. Yes, its bottomline hit looks worse than it actually is because Q1FY25 was helped by a one-off gain. But even excluding that, profits still missed analyst expectations.

Here are its key stats:

• Net Interest Income: Rs 7,248 cr; +6% YoY (vs Est: Rs 7,293 cr)

• PAT: Rs 3,282 cr; -58% YoY (vs est: Rs 3,442 cr)

• Gross NPA: 1.48% vs 1.42% QoQ

• Net NPA:  0.34% vs 0.31% QoQ

Big Picture: Overall, a pretty weak Q1. Most brokerages trimmed their target price, with Nomura reducing it to Rs 2,150 p/sh. But the stock’s movement today really is about Kotak quickly falling behind leaders ICICI and HDFC; both of whom are managing the banking sector’s headwinds FAR better than anyone else. 

Kotak Mahindra Bank is +10% YTD.

Cartrade Tech (+8%) jumped after blockbuster Q1 results. Strong demand across key verticals helped the company deliver its highest-ever quarterly revenue. Its core ‘consumer group’ vertical -- aka Carwale and Bikewale -- grew +32% YoY. But its ‘remarketing’ division, which handles auctions of used cars, was a big surprise growing +36% YoY. Fun fact: it’s now almost as big as the ‘consumer group’ division in terms of revenue! On the bottomline front, OLX India (aka classifieds) helped juice up the company’s margins by cutting down on expenses, which boosted overall profits!

Here is its Q1 report card:

• Revenue: Rs 173 cr; +22% YoY

• EBITDA: Rs 45 cr; nearly +2x

• EBITDA Margin: 25% vs 15% last year

• PAT: Rs 47 cr; +2x YoY

CarTrade is +35% YTD

Specials
Eternal - Buy Now or Wait For Dip?

Eternal is trading at all-time highs after rallying +50% in the last 6 months. 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 covering its latest Q1 results, industry landscape, earnings trend and more.