Markets Selloff On Israel-Iran Tensions

Author

Yash Upadhyaya
April 15, 2024

Tale of the Tape 

Hiya everyone. Looks like Iran fired some missiles at the Indian markets too. 🙈

Nifty and Sensex fell -1.1% each as the Middle East crisis spooked investors leading to a broad-based selloff. Midcaps (-1.6%) and Smallcaps (-1.7%) got thrashed as well. 417 stocks in the NSE 500 ended in the red! 🚨

Check out the Stocktwits Sentiment Meter:

Except for Oil & Gas (+0.4%), all other sectors ended in the red. Banks (-1.6%), IT (-1.6%) and Real Estate (-1.1%) got beat up the most. 🤕

The BJP’s manifesto for the 2024 elections is out. More details below on what sectors could end up being long-term wealth creation opportunities. 💰

Does TCS’s Q4 results signal the IT sector may have bottomed out? Check our analysis below to find out. 🔍

WTF is happening with Israel and Iran right now? Look out below for the reasons behind today’s sell-off. 📉

ONGC (+5%) was the top Nifty gainer after Jefferies initiated coverage on the stock; the brokerage sees a +47% upside from current levels. 🤑

Aster DM jumped +8% after approving a special dividend of Rs 118 p/sh. 💸

Senco Gold zoomed +18% after posting a strong Q4 business update. 📊

Ambuja Cement will buy a grinding unit in Tuticorin for Rs 414 cr. 🏭

Ramkrishna Forgings (+3%) won a Rs 270 cr order to supply Vande Bharat train sets. 💺

Here are the closing prints: 

Nifty

22,273

-1.1%

Sensex

73,400

-1.1%

Bank Nifty

47,773

-1.6%

Markets
BJP Manifesto 2024: Key Highlights

Elections are less than a week away! And with that, the Bharatiya Janata Party’s manifesto is finally here. FYI - Modi and BJP are widely expected to win, the only debate is about what margin. Some of the biggest winners of 2023’s bull run were sectors that saw major GOI support. This is why the manifesto’s promises + the BJP’s first 100 days are so important. Here are the top priorities for GOI investment: 💯

1) Railways: The BJP has promised to add 5k+ km of new tracks every year, and new Vande sleeper trains. Also expanding the metro network + considering bullet train corridors in north, south and east India. For stocks, there’s the classic BEML, Titagarh, and Texmaco, but brokerage Philip Capital says a steel play could also be useful (APL Apollo, JTL, Surya and Hi-Tech). 🚉

2) Manufacturing: The PLI scheme has been pretty successful for electronics, and the BJP says it will continue to focus on that. It also has big plans to make India an auto + EV export hub. For EVs, Tata Motors and TVS currently have the biggest market share. Dixon Technologies and Amber Enterprises are also solid long-term bets. 💪

3) Green Energy: The BJP has reiterated its goal of hitting 500 GW of renewable energy capacity. It's also promised a new green energy corridor project! Yes, we know renewables have kinda slowed down recently but analysts say Schneider Electric, Siemens, Suzlon, KPI Green and Inox Wind still look strong overall. ♻️

4) Piped Gas: The GOI has already given piped gas connections to 11 million households around the country. The BJP plans to expand this program to EVERY major town & city. Philip Capital says city gas distribution firms like IGL, Mahanagar Gas, GAIL and Gujarat Gas could stand to benefit. But this could also end up being a big positive trigger for pipe firms like Welspun Corp, Maharashtra Seamless and Ratnamani Metals. 🔥

Specials

4 Multibagger Stocks To Buy - By Jefferies

Are you on the lookout for multibagger stocks to invest in? Don't worry, we've got you covered!

In our recent video, we delve into four multibagger stock picks by Jefferies. With detailed reasoning on why one might consider investing in each of these stocks, we also share their respective targets and much more. Watch the video to learn more.

Earnings

TCS Q4 Review

TCS Q4 results were a mixed bag, with some pluses and minuses. But what all investors really want to know: has the sector bottomed out? Let’s get into it. 🤓

First, the positives. Deal wins across verticals & geographies went through the roof. The total contract value (TCV) of the wins hit a record $13.2 billion in Q4 and $42.7 billion in FY24. The company’s EBIT margin hit a THREE-YEAR-HIGH of 26%, beating Street expectations. Fun fact: the margin beat came even as third-party + travel costs were up. Some of this is due to a lower headcount, but it's also TCS really working its pricing + productivity levers. 👍

But then there’s the not-so-great stuff. Revenue growth in CC (constant currency) terms missed estimates. Key BFSI, high-tech and telecom verticals all remain under severe pressure. The UK (+4%) and Europe markets (+1%) are doing okay-ish, BUT North America is still weak (-0.1%). 🌎

Here are its key stats:

  • Revenue: $7.36 billion; +1.1% QoQ (vs Est: $7.4 billion)

  • Net Profit: Rs 12,240 cr; +4.3% QoQ (vs Est: Rs 12,080 cr)

Big Picture: Has TCS and the IT sector bottomed out in FY24? The problem is that the same data can be viewed in different ways. Take headcount for example. TCS ended FY24 with a reduction of 13,249 employees, the FIRST DROP since it went public in 2004! Is this a sign of lingering demand weakness or AI taking away jobs? 🤖

Analysts too are divided on TCS. JP Morgan, Goldman Sachs and UBS are the big bulls, with UBS seeing an +18% upside from current levels. Meanwhile, bears like Nomura say that near-term growth visibility is too low and that TCS can't really increase margins further. 📊

What’s your view on the stock?

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Charts

Chartbusters

Markets took a thrashing today after a broad-based selloff. The reason? Over the weekend, the Middle East conflict took a turn for the worse. Iran chose to attack Israel with a bunch of drones and rockets. FYI - this was a tit-for-tat move since Israel bombed Iran’s consulate in Syria earlier this month. Yes, it’s all a little fuzzy, but the larger point is geopolitical instability is awful as we learned with the Russia-Ukraine war. Oil and commodity prices can go haywire, trade routes can get clogged, causing a slowdown in the global economy. 👎

The silver lining here is that both Iran and Israel don’t seem to want to escalate anything further, which is GOOD. If both countries just want to throw their weight around, that’s pretty much OK considering the alternatives. After all, India has a lot of other things to worry about. NBCC, Hindustan Zinc, and KEC International dropped -6% each. Check out their charts below: 📉

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