Tale of the Tape 

Hola Amigos! 👋

Nifty (+0.5%) and Sensex (+0.4%) ended higher for a third straight session. Midcaps (+1%) and Smallcaps (+2%) popped off. The advance-decline ratio was in favour of the bulls (4:1). 📈

Most sectors ended in the green. Metals (+2.8%), Auto (+1.8%) and Oil & Gas (+1.6%) saw the most buying. FMCG (-0.5%) and Pharma (-0.4%) witnessed some selling pressure. 💸 

Zomato (-3%) got hit by a three-pronged blow today. Meanwhile, JSPL was up +4% on hopes of a stronger FY25. 📊

Go Digit General Insurance IPO, backed by Virushka, opens for subscription tomorrow! Check out our analysis below to help you decide whether to invest. 🔍

Cochin Shipyard, Railtel and HAL all saw big movements today. Check out their charts below to understand why. 🔥

Mankind Pharma (+3%) gained after reports said it may acquire Bharat Serum and Vaccines from PE firm Advent. 💉

Shriram Finance rallied +5% intraday after confirming the sale of its housing finance unit to Warburg for Rs 4,630 cr. 💰

Indus Towers (+3%) was up after Nuvama said it could enter the MSCI Standard Index tomorrow. 👍

RVNL (+7%) won a Rs 239 cr from Southern Railways. 🚉

Here are the closing prints: 

Earnings
Earnings Roundup

Zomato cracked -6% intraday after the stock was hit by a mixture of confusion, disappointment and profit booking. ICYMI - the firm has been killing it over the last few quarters. So what’s got investors nervous? 🤔

Firstly, its Q4 results, while good, missed Street estimates. This is a shame because there’s a LOT to like here. Gross order value (GOV) across verticals was up 51% YoY. Margins for the food biz jumped to 16.2% vs 6.9%. Best of all, its quick commerce vertical Blinkit finally turned PROFITABLE in March 2024. 💯

Here are its stats:

• Revenue: Rs 3,562 cr; 73% YoY

• EBITDA: Rs 86 cr vs loss of Rs 226 cr last year

• PAT: Rs 175 cr vs Rs 188 cr loss (vs Est: Rs 188 cr)

The second negative signal is that ESOP costs are likely to increase. Zomato announced a new stock ownership plan for 18.3 cr shares, or 2% stake, worth around Rs 3,400 cr. This sucks because ESOP costs ALREADY jumped to Rs 161 cr in Q4FY24 vs Rs 84 cr in Q4 FY23. FYI - Nuvama is cutting FY26 EBITDA projections for the food delivery segment by 10% as a result. 📊

Finally, profit-booking hurt the stock too. Zomato is up a whopping +3x over the last year. Makes sense for some investors to get out when the going is good. That said, brokerages are still upbeat with most of them increasing their target prices:  Elara (Rs 250 p/sh → Rs 280 p/sh), Nuvama (Rs 180 p/sh ---> Rs 245 p/sh) and CLSA (Rs 227 p/sh → Rs 248 p/sh). 🚀

Jindal Steel and Power (+4%) Q4 results met Street estimates! Robust domestic business partly offset the weak global demand to restrict a topline decline. Lower raw material costs helped boost margins and the bottomline. FYI - this boost comes despite a drop in net sales realisation! 👍

The stock also reacted to the management’s bullish outlook. JSPL expects volumes to be better in FY25. It also talked up the global steel cycle, which experts think could translate into a Q1FY25 margin bump! FYI - Kotak has a new price target of Rs 1080 p/sh;+10% from current levels! 🤑

Here is its Q4 report card:

• Revenue: Rs 13,487 cr; -1% YoY (vs Est: Rs 11,839 cr)

• EBITDA: Rs 2,445 cr; +12% YoY

• EBITDA Margin: 18.1% vs 16% last year

• PAT: Rs 933 cr; +100% YoY (vs Est: Rs 1,070 cr)

JSPL is +32% YTD.

Specials

Raising A Toast

Can United Breweries go from being the King of good times to the King of your portfolio? Check out our latest YouTube video where we break down the company’s latest quarterly earnings, technical chart setup, brokerage ratings and more!

IPO

Go Digit IPO Review

Go Digit General Insurance IPO opens for subscription tomorrow! The price band is fixed at  Rs 258-272 p/sh. The company aims to raise Rs 2,615 cr from the IPO. 💸

Founded in 2016, the company is a ‘full-stack’ digital insurance firm. Fun fact: Go Digit is backed by none other than Virat Kohli and Anushka Sharma; they both bought a minority stake in the firm back in 2020! It offers everything from motor & health to marine & travel products. But what the company really specializes is in the group health insurance biz; it goes after corporate clients that pay premiums for their employees. As of December 2023, it had 43 million customers, 74 active products and nearly 62,000 key distribution partners. After two rough years of losses, the company turned profitable in 2023! 💪

FYI - the IPO’s fresh issue of shares comes in at Rs 1,125 cr; the rest being an ‘Offer for Sale’. PS - don’t worry, Virushka will remain investors. The bulk of the money raised will be used to bolster solvency levels & boost the company’s capital base. 📈

9MFY24 snapshot:

• Net earned premium: Rs 5,115 cr; +36% YoY

• PAT: Rs 129 cr; +10x YoY

Big Picture: Go Digit has done well to turn its company around, although it still has some rough edges to smooth out. A lot of its future growth depends on how well it can crack newer markets. Take motor vehicle insurance, for example, which is a fiercely fought segment. The company has so far managed to gain only a 6% market share as of Dec 2023 despite years of trying. FWIW - the IPO is reasonably priced and current grey market data suggests it may list at a decent 15% premium! 😇

Charts

Chartbusters

A PSU a day keeps the doctor away! Here are three companies that saw BIG movements today:

1) Cochin Shipyard JUMPED +11% intraday after it said it won a ‘large’ order from a European client for designing & constructing a service operation vessel. FYI - the PSU firm classifies large orders as between Rs 500-1,000 cr. To put that in context, the company reported Rs 1,050 cr in revenue in Q3FY24! 🔥

2) Railtel soared along with a bunch of other railway firm peers. What’s popping? With the heatwave slamming most of India, people are traveling to cooler destinations! Searches for train tickets are up +20% YoY in May-June. Fun fact: wait lists for New Delhi- Bengaluru trains have hit the roof! Higher railway demand = higher GOI investment in the sector. 🚀

3) Hindustan Aeronautics hit a record high after a massive upgrade by UBS. The brokerage projects HAL’s order book will QUADRUPLE by FY28. It says HAL will gain big time from GOI’s continued domestic defence push, noting that it could win orders worth Rs 6.5 lakh in the most bullish scenario. FYI - UBS’s new target is Rs 5,200 p/sh; +28% from current levels! 🤑

Check out their charts below:

Links That Don’t Suck

💯 Buy United Breweries shares? BIG Targets on United Breweries | UBL share analysis 

📈 Check out this bullish chart setup on L&T by SEBI RA Madhumita Banerjee 

🤖 OpenAI launches new AI model and desktop version of ChatGPT 

🍦 Is Your Ice Cream Fake? Here’s How to Identify 

🏏 IPL 2024 Playoff Race: How GT vs KKR Washout Affects RCB, CSK, LSG And SRH

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