Tale of the Tape 

Good evening boys and girls. Markets closed up for a third straight week.

Nifty and Sensex cooled off sharply after opening higher to end near the day’s low. PS - the Stocktwits India Momentum Index closed flat. Midcaps (-0.2%) and Smallcaps (-0.1%) also ended with minor cuts. The advance-decline ratio was split evenly. 

Most sectors ended in the green. Pharma (+1.2%) and Enegy (+0.9%) were the stars of the day. On the other hand, Real Estate (-1.2%) and Banks (-1%) witnessed profit booking. 

HDFC Bank has quietly hit a new all-time high after doing nothing for 3 years. Is the banking giant setting up for a big move or is it gonna be the same old story? Find out in our top story below. 

Diffusion Engineers’ Rs 158 cr IPO got oversubscribed ~25x on day 2. Find out below what the company does, its financial track record and grey market premium before applying.

Sugar stocks were flying again on price hike buzz. Shree Renuka Sugars, Bajaj Hindustan and Balrampur Chini rallied between 7% to 11%. Check out their charts below. 

IT stocks reacted positively to Accenture’s strong Q4 results. FYI – Accenture’s bullish guidance sparked hopes of strong earnings growth for Indian IT companies. Finlight Research’s top pick from the space is Tata Elxsi. Here’s why: 

Tata Power jumped +3% intraday after a double upgrade by Morgan Stanley. PS - they see a further +20% upside from current levels. 

Index rejig. Trent and BEL will replace Divis Lab and LTI Mindtree in the Nifty. Also, Canara Bank will take Bandhan Bank’s place in Nifty Bank. Here’s the full list of changes. 

Nuvama Wealth was in focus after 22 lakh shares (6.2% equity) changed hands in a mega block deal. Promoters Edelweiss Finance and Ecap Equities were the sellers, according to media reports. 

SJVN rallied +6% after signing two new agreements with the Maharashtra Govt wroth Rs 48,000 cr. 

Waaree Renewable was locked in a 5% upper circuit. The company is reportedly in talks to acquire Enel Green Power India for $300-$350 million. 

Here are the closing prints:

Stock
HDFC Bank Is Back!

HDFC Bank is back at all-time highs! ICYMI - the stock is up a solid +22% in the last six months. Is the banking heavyweight set to take off? We don’t blame you for being a little cautious. After all, HDFC has gone nowhere in the last 3 years missing out on one of the greatest bull rallies. But, here’s why it may be different this time around. 

First up, we have rate cuts. The US Fed has kicked off an easing cycle and most experts say the RBI will join by December. Generally-speaking, interest rate cuts are a double-edged sword. They help boost credit growth but reduce a lender’s margins. But since loan growth is already low, most experts agree this is a net positive for HDFC.

The second trigger will be two big value-unlocking opportunities with the HDB Financial and HDFC Credila IPOs. Both public issues have been approved and should hit the markets over the next few months. FYI - HDB Financial is valued at around $7-$8 billion while HDFC currently retains at ~10% stake in Credila which should see big gains on its listing.

Finally, reports say HDFC recently sold home loans worth $717 million to ease its credit load. This is a HUGE step. Yes, it will reduce long-term earnings potential by a tad, but will help improve its awful credit-deposit ratio which is what the Street wants.

Big Picture: Take things one step at a time. Q2FY25 will be the first comparable quarter since its merger. Experts are expecting a small bump in margins, big deposit growth and credit costs to remain flat. Meanwhile, it doesn’t hurt that HDFC’s valuations look great right now. FYI - BNP Paribas has a target price of Rs 2,550 p/sh;+ a whopping +45% potential upside from current levels.

Stocktwits Specials
Buy The Dip In Defence Stocks?

Most defence stocks are down 25-30% from their all-time highs. Experts say this could be a “golden opportunity” to add select defence stocks at current levels. Find out which are these stocks and their 12-month target prices in our latest video.