Market Kya Lagta Hai?

Author

Yash Upadhyaya
February 21, 2024

Tale of the Tape 

Good evening everyone! Markets took a slight hit after hitting new highs. 📉

A last-hour slump took the Nifty and Sensex down -0.6% each. Midcaps (-1.2%) and Smallcaps (-1%) took an even bigger beating. The advance-decline ratio was in favour of the bears (3:2). 🐻

It was a mixed-bag kinda day for sectors. Energy (-1.7%), IT (-1.6%) and Auto (-0.5%) saw selling pressure. Real Estate (+2%) and PSU Banks (+0.6%) saw decent buying. 💪

Markets are at all-time highs. How did we get here, and what should you be looking to buy now? Read our analysis below. 😎

GPT Healthcare IPO opens for subscription tomorrow. Read our top story on whether you should invest. 🔍

Zee Entertainment (-14%) was the top loser on the NSE 500 after reports said SEBI’s probe found a whopping Rs 2,000 cr fund diversion. The company’s denial did not lift the stock. 🚨

Paytm was locked in a 5% upper circuit for the 4th straight day! Reports say it is signing new partnerships with banks to transfer its bill payment services. 😇

Raymond rose +6% after its real estate arm launched its first project in Mumbai’s Bandra East. 🏗️

Devyani International (+1%) was in focus after 5.3 cr shares, or a 4.4% stake, changed hands in a block deal; reports said Yum Restaurant India was the likely seller. 🤝 

Union Bank of India was up 3% after it said it would raise Rs 3,000 cr via the QIP route. 💰

HFCL hit a 52-week-high after opening a Rs 144 cr optical fibre plant in Poland. 📈

ABB India surged 11% on strong Q4 numbers. 🤑

Here are the closing prints: 

Nifty

22,055

-0.6%

Sensex

72,623

-0.6%

Bank Nifty

47,020

-0.2%

Stocktwits Alert 🚨🚨🚨

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Market
Markets Hit New Highs But Where To Invest? 

Markets are at new all-time highs! The Nifty is up +24% over the last year, capping an INCREDIBLE bull run. Midcaps (up a crazy +58%) and Smallcaps (an insane +71%) are also on absolute fire. 🔥

ICYMI - The bull run kicked off from April 2023 after  The US Federal Reserve started its ‘rate pause’ cycle from June 2023 and FIIs started to return after being net sellers for most of 2022. What also helped was falling oil prices. Brent crude averaged $83 per barrel in 2023 vs $101 per barrel in 2022. Even though the global economy slowed down, it was a double bonanza as TONS of foreign money left China and came to India. Fun fact: India overtook Hong Kong as the world’s fourth-largest stock market in Jan 2024! 📈

Closer home, falling input costs also lifted margins & profitability across sectors. Domestic inflation also cooled from 2022 highs. Finally, the BJP sweeping state elections in Dec 2023 helped bake in a strong likelihood of a 2024 Lok Sabha victory as well. ✌️

Looking ahead, India has a bunch of positives. It’s the world’s fastest-growing major economy, infra-spending is at an all-time high,and  over 50% of Indians are under 25 (demographic dividend FTW). But what’s less clear is how much of that is ALREADY in the price. Over 65% of Nifty Midcap 100 stocks and 70% of Nifty Smallcap 100 firms are trading at a premium to their historical valuations. 👀

But valuations are only half the story. Experts say there are some sectors that are still cheap (BFSI, cement, telecom) and some companies that have a strong story. FYI - some of the top picks even at market ATH include: PB Fintech and Mahanagar Gas (by Citi India), Aurobindo Pharma and Bandhan Bank (by HDFC Securities), BPCL and Sona BLW Precision Forgings (by Elara Securities). 💯📈

SPECIALS

SEBI RAs share their top 4 PSU stock picks

The Nifty PSU Bank index is up 24% in 1.5 months. But what are the key reasons for this rally? Also, which PSU Banking stocks should you buy right now? 👀

Check out our recent video as we cover all the major updates, its future outlook and 4 trade setups on PSU Banks by SEBI RAs! 🚀

IPO

GPT Healthcare IPO Review

GPT Healthcare IPO opens for subscription tomorrow! The price band is fixed at Rs 177-186 p/sh. The company aims to raise Rs 525 cr from the issue. 💸

Founded in 1989, the company operates a series of mid-sized hospitals mainly in Eastern India. It manages four multi-speciality hospitals across West Bengal and Tripura with a total capacity of 561 beds. The company mostly offers secondary & tertiary services, providing over 36 specialities & super specialities. As of Sept 2023, GPT’s bed occupancy was a little under 60% (vs industry average of 63%-65%). Its average revenue per occupied bed, a key metric, came in at Rs 29,671 as of FY23.  Finally, it’s looking to set up two greenfield projects in Chhattisgarh and Jharkhand, which will increase its bed capacity by 292. 🏥

FYI - the IPO has a HUGE ‘Offer for Sale’ component. Less than 8% (approx. Rs 40 cr) will actually come into the company through a fresh issue, which is a negative tbh. 👎

FY23 snapshot:

  • Revenue: Rs 361 cr; +7% YoY

  • EBITDA Margin: 21.8% vs 23% YoY

  • PAT: Rs 39 cr; -5% YoY

Big Picture: Healthcare is booming in India, but it's not clear if GPT is doing its best to capitalize on it. The company is heavily concentrated in West Bengal (70% of FY23 revenue), which is fine. But, it misses out on some speciality services and also has a lower bed occupancy rate than listed peers. Its FY23 performance was nothing great, although there are signs that FY24 is shaping up to be a little better. FWIW - the IPO is reasonably priced, but current grey market data suggests it may list near its issue price. 🥱

Stocktwits Spotlight

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Disclaimer: Mukesh Chauhan is not a SEBI registered advisor and you should not construe any information discussed herein to constitute investment advice. Consult your financial advisor prior to making any actual investment or trading decisions.