Tale of the Tape 

Good evening y’all and welcome back to another week in the markets!

Markets were up big ignoring the mounting geopolitical tensions. Hopes of continued RBI support after retail inflation hit a 6-year low boosted sentiment. The rally was broad based with not a single sector closing in the red. IT (+1.6%), Real Estate (+1.3%) and Metals (+1.1%) were the stars of the day. The advance-decline (3:2) ratio was comfortably in the favour of the bulls.

Today’s issue covers Jhunjhunwala logging out of Nazara, JLR’s depressing business outlook, Morgan Stanley’s double upgrade on PI Industries and more.

Honourable mentions:

Bajaj Finance was in focus after adjusting for the 1:2 stocks split and 4:1 bonus issue. Here’s the calculation for those interested. Asian Paints saw another 85 lakh shares change hands in a mega block deal. Complete exit by Reliance? Vedanta will consider the proposal of an interim dividend on 18th June. Recently-listed Belrise Industries jumped +4% intraday on strong Q4 results.

Check out the NSE500 heatmap:

Stock
Jhunjhunwala Logs Out Of Nazara

Nazara Technologies was in focus after the late Rakesh Jhunjhunwala’s family completely exited from the stock. FYI - reports say the Big Bull got in by investing around Rs 180 cr in 2017-18. After selling their ~3% stake over the last two weeks, the family netted around Rs 770 cr which translates to a 4x return over 8 years. Not bad!

For those wondering if there’s something wrong with the company. Not really: Nazara has been doing OK. Its Q4 FY25  revenue nearly doubled YoY, helped by its core gaming vertical + improved unit economics in its education division. Experts also project that sales will grow at a 28% CAGR over the next two years boosted by the recent acquisition of UK-based Curve Games. Yes, the GST litigation pending in the Supreme Court is a big overhang, but most analysts believe that will eventually be decided in the gaming sector’s favour.

So what seems to be the problem? It’s mostly valuations. The stock is up a whopping +34% over the last six weeks, hitting a four-year-high! Prabhudas Lillader says this means the “growth trajectory is priced in”. PS - the brokerage recently downgraded the stock and says the stock may go sideways for a bit.

Big Picture: Tbh, Jhunjhunwala’s family exiting isn’t a huge red flag. This is mostly why the stock barely moved today. On top of that, Nazara still has ~Rs 600 cr cash on its books. The management has already announced that this will be used for future acquisitions. So don’t write off its growth potential just yet!

Specials
BSE - Wait or Invest?

After a +3x in the last 1 year, BSE is a stock that everyone has an eye on. But, does it have room for further upside from current levels? Check out our latest video where we cover the company’s fundamentals, technicals, brokerage ratings and SEBI RA views in ~5 mins.