Modi and Markets

Tale of the Tape 

Good evening everyone. Markets fell for a third straight day! 📉

Nifty (-1%) and Sensex (-0.8%) recovered from the day’s low but still ended deep in the red. Midcaps (-1.3%) and Smallcaps (-1.6%) got KO-ed. 414 stocks in the NSE 500 ended in the red! 🚨

Except Banks (+0.3%), all sectors ended in the red. Metals (-3%), IT (-2.2%) and Pharma (-1.8%) were the top losers. 🩹

How many seats does the BJP need for Nifty to see double-digit growth in 2024? Read our top story below on the election’s impact on markets. 🔍

Tata Steel was the top Nifty loser despite okay-ish Q4 numbers. Meanwhile, Cummins India cracked -6% after a gloomy FY25 outlook. More details below. 📊

Emami, IRB Infra and Edelweiss Financial Services all saw big movements today. Check out their charts below to find out why. 🔥

Sun Pharma (-1%) was in focus after reports claimed the USFDA issued 4 observations for its Dahej facility. 👎

CG Power (+3%) got its highest target price from UBS; the brokerage sees a +35% upside from current levels. 🚀

Results reaction. SJVN fell -4% despite reporting decent Q4 results. Meanwhile, Lemon Tree Hotels rallied +6% intraday after a strong Q4 show. 💰

Kfin Technologies cracked -9% after 13 lakh shares (nearly 6% equity) changed hands in a block deal. Reports claim PE firm General Atlantic Singapore Fund was the likely seller. 🤝

Paytm was locked in a +5% upper circuit for the second day in a row. PS - looks like investors don’t believe all the denials surrounding the Adani deal! 👀

Here are the closing prints: 







Bank Nifty



Market Reaction To Different Election Outcomes

In less than a week, we’ll know the results of the 2024 elections. Over the last month, things have gotten pretty crazy with FII selling and volatility increasing. As if that wasn’t enough, India’s politicians have started to give market targets! To help you plan around this uncertainty, here’s a list of future scenarios that breaks down how markets will react, courtesy of the folks at Bernstein. 💯

1) Scenario 1: The BJP wins 290+ seats and the NDA gets 340+. The big infra and capex run will continue and GOI will invest heavily in manufacturing incentives. Markets could see an immediate rally followed by short-term profit booking. Depending on global factors, Nifty could see low-double-digit returns for the rest of this year.

2) Scenario 2: The BJP wins 260-290 seats, NDA gets 290-340 seats. Existing schemes will likely continue, but GOI capex will likely slow down. The rate of new project announcements may also reduce. The fiscal deficit should still wind down to 4.5% by FY26. There may be mild profit booking in the near term, with high single-digit market returns likely for 2024. 📈

3) Scenario 3: The BJP wins 240-260 seats, while the NDA bags a bare majority of 270-290. GOI will likely reduce infra-spend & manufacturing focus, putting the burden on the private sector. The focus may shift to freebies and possibly tax breaks. As a result, consumption could accelerate. Markets could see heavy profit booking in the near term, with the Nifty giving single-digit market returns for the rest of the year. 😣

4) Scenario 4: BJP and NDA both fail to get a majority. Funds will be shifted from infra to the social sector. Only the most viable private sector projects will move forward. Rural consumption will pick up as new GOI schemes target the sector. Higher taxes on corporates or the rich are likely, with FDI falling. End result: intense selling pressure in the near term with low or negligible returns for markets in 2024. 👀

Which scenario will play out, according to you?

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The Telecom Battle ⚔️

Bharti Airtel is on fire! The stock is +68% in the past year to hit a new all-time high of Rs 1,407 p/sh. But, is it still a buy at current levels or should you wait for a dip?

Check out our latest video where we break down all the key updates on Bharti Airtel, covering both fundamental and technical analysis. Also, find out SEBI RAs’ views on the stock. 👇🏻


Earnings Roundup

Tata Steel’s (-5%) Q4 results mostly beat Street estimates. Higher domestic volumes were offset by muted global demand. But, weak realisations and higher restructuring expenses in its UK operations led to lower margins and ultimately took a chunk out of the bottomline. FYI - global steel prices were down for most of Q4FY24. 📉

The results beat estimates, but Tata Steel ended as the top Nifty loser because the numbers still aren’t great. What’s worse is that most experts see global steel prices being subdued for the rest of 2024. While non-ferrous metals are seeing a HUGE rally, it looks like steel is being left by the wayside for now. 👎

Here are its stats:

  • Revenue: Rs 58,687 cr; -7% YoY (vs Est: Rs 58,170 cr)

  • EBITDA: Rs 6,601 cr; -9% YoY ( vs Est: Rs 6,179 cr)

  • EBITDA Margin: 11.3% vs 11.5% YoY

  • PAT: Rs 555 cr; -65% YoY (vs Est: Rs 942 cr)

Tata Steel is +19% YTD.

Cummins India cracked -6% after its management raised red flags over its margins & exports in upcoming quarters. For the unaware: the company makes diesel and natural gas engines. It depends on key metals as raw materials, the prices of which are BOOMING right now due to the global metal rally. Higher commodity costs = lower future margins. 📊

The management also pointed to a weak export forecast, noting that its European market is at an all-time low and its Africa biz is struggling due to forex fluctuations. This grim outlook, combined with the stock’s pricey valuations, led to investors dumping it. 💸

This is a pity because it had a GREAT Q4. Strong domestic growth resulted in double-digit top line growth, while better operational efficiency boosted margins & the bottomline. Here are its stats: 

  • Revenue: Rs 2,319 cr; +20% YoY

  • EBITDA Margin: 23.5% vs 16.9% YoY

  • PAT: Rs 531 cr; +50% YoY

Cummins India is +2x over the last year. 🚀



Here are three companies that saw big movements today:

1) Emami was the top gainer on NSE500 on strong Q4 results. At a time when most FMCG firms are struggling, the company reported positive topline & bottomline growth. FYI - multiple brokerages have upped their target price on the stock, including Goldman (Rs 560 p/sh ----> Rs 640 p/sh) and Nuvama (Rs 630 p/sh ---> Rs 645 p/sh).

2) IRB Infra was under pressure after 31.3 cr shares (5.2% equity) changed hands in multiple block deals. Reports say a promoter entity may have been one of the sellers although this is not confirmed. This does appear to be the season of block deals though, with all-time high markets providing an attractive exit point for investors. 🤑

3) Edelweiss Financial Services TANKED -16% intraday after the RBI slapped restrictions on two of its financial services entities, citing “material supervisory concerns”. FYI - the central bank believes that ECL Finance and Edelweiss’s ARC may have allegedly been ever-greening stressed loans. Yikes! 🚨

Check out their charts below: 📈 

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