Tale of the Tape 

Hola Amigos. Welcome back to the Daily Rip!

Markets kicked off the week on a positive note, with the Nifty (+0.3%) and Sensex (+0.4%) ending in the green. Midcaps (+0.5%) and Smallcaps (+0.4%) moved in sync. The advance-decline ratio was in favour of the bulls (3:2). FYI - this tracked a rise in global markets as investors cheered a deal to break the US govt shutdown.

Most sectors finished higher. IT (+1.6%) and Pharma (+1%) were the top gainers. Real Estate (-0.2%) and FMCG (-0.2%) stocks saw minor cuts.

In today’s issue of the newsletter we cover KPIT Tech and Trent’s Q2 results, the upcoming Physicswallah IPO, top newsmakers and more.

Honourable Mentions:

Lenskart defied expectations of an awful market debut. The stock ended Rs 405 p/sh; +1% higher than its IPO price. Sugar stocks were in focus after the GOI approved 1.5 million tons of exports for the ongoing sugar season.

Check out the NSE 500 heatmap:

Earnings
Earnings Roundup

Trent (-7%) was the top NIfty loser after a disappointing Q2 show. Stiff competition + meh demand led to its topline missing Street estimates. FYI - the retailer’s revenue grew at its slowest pace since 2021. The slowdown is clearest in its core fashion portfolio where LFL (like-for-like) growth was in “low single-digits” vs double-digits last year.

At the other end of the balance sheet, things look a little better. Lower employee & rental costs helped bump up margins. But even with that, the bottomline still missed expectations.

Here are its key stats:

• Revenue: Rs 4,817 cr; +16% YoY (vs Est: Rs 4,998 cr)

• EBITDA: Rs 817 cr; +27% YoY

• EBITDA Margin: 17% vs 15.5% last year

• PAT: Rs 373 cr; +11% YoY (vs Est: Rs 446 cr)

Big Picture: Fundamentally, there’s nothing wrong with Trent. It had an insane 2021-24 and is now naturally being compared unfavorably to a high base quarter. There’s really just one big question. Can its fashion biz fend off newer rivals and post solid growth? Trent is trying with new youth-focused stores called Burnt Toast, but we’ll see how it pans out. FWIW - most analysts agree its correction is overdone at this point. Even Goldman Sachs, which cut its target price, still sees a +15% upside from current levels.

Trent is -39% YTD.

KPIT Technologies posted okay-ish Q2 results. Robust growth in UK & European markets helped offset a small slump in North America biz. FYI - it was helped quite a bit by its Caresoft acquisition, without which it would’ve actually reported a topline dip.

Margins stayed steady on the back of careful cost measures. Finally, while the bottomline numbers look bad, the drop is mostly because Q2FY25 was juiced up by a bump in other income.

Here is its Q2 report card:

• CC Revenue: $181 million; +2% QoQ

• PAT: Rs 169 cr; -17% YoY

We know what you’re thinking: if the results were mid at best, why did the stock rally +4% intraday? For starters, the management guided for a strong H2FY26 and FY27, noting that it would be “better”. But really, even semi-decent results are better than nothing during this tough time for the IT sector.

KPIT Tech is -20% YTD.

Specials
Time To Buy Suzlon?

Suzlon is down 33% from its highs, what’s next for the stock? 📉

In our latest video, we break down Suzlon’s fundamentals and technicals, along with the latest analyst ratings.