Tale of the Tape 

Good evening everyone. Markets were back in the green! 📈

Nifty (+0.5%) and Sensex (+0.7%) ended higher after strong buying in heavyweight largecaps. Midcaps were flat but Smallcaps popped off (+1%). The advance-decline ratio was evenly split. ✌️

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It was an even mix of green and red across sectors. Real Estate (+0.8%), Oil & Gas (+0.5%) and Auto (+0.5%) saw decent gains. PSU Banks (-1%) and IT (-0.6%) stocks witnessed some selling pressure. 💸

Reliance Industries (+3%) was the top Nifty gainer after Goldman Sach’s stamp of approval. Read our top story below on why the brokerage is so bullish. 🚀

ABB India (+6%) has been on a red, hot streak. More details below on the reasons behind its rally. 🔥

Maruti Suzuki (+3%) crossed the Rs 4 lakh cr market cap mark. 🚗

Angel One jumped 10% after its Rs 2,000 cr QIP fundraise kicked off; the floor price is set at Rs 2,555 p/sh. 💰

Block deals. Aster DM (-7%) was the top NSE 500 loser after 5.1 crore shares, or a 10.1 per cent stake, changed hands; reports say PE firm Olympus was the likely seller. CDSL cracked 6% after 77.2 lakh shares, or 7.4% equity, were sold; Standard Chartered was the likely seller. 🤝

Wockhardt hit a 5% upper circuit. Ace investors Madhusudan Kela and Prashant Jain participated in its Rs 480 cr QIP fundraise. 💯

Shriram Finance was in focus ahead of its Nifty inclusion tomorrow; Nuvama says it could see inflows of up to $260 million. ✅

AstraZeneca Pharma gained +4% after getting the regulator’s nod to import a cancer drug. 💊

Here are the closing prints: 

Stock
The Elephant Is Ready To Dance

Reliance Industries (+3%) was the top Nifty gainer after Goldman Sachs said it sees a WHOPPING +54% upside in its bull case scenario. We don’t blame you for being a little cautious. The stock went nowhere in 2023 but has made a solid start to 2024 (+15% YTD). Is that enough to get excited? Let’s find out why Goldman is SO bullish: 🤓

1) Capex cycle: RIL’s massive investments are FINALLY coming to an end. ICYMI - the company put in $90 billion between FY13 and FY24 to boost its oil biz and create infrastructure for Jio. It also front-loaded all the capex for its retail vertical. All of this meant that Reliance’s free cash flow was mostly NEGATIVE for the last decade. This will turn positive from FY25. Why does all this matter? Because it means RIL will start seeing a jump in its ‘cash return on cash invested’ metric. This will boost earnings and, hopefully, the stock price as well. 🔥

2) Value unlocking: Yes, the oils to chemicals (O2C) biz remains RIL’s cash cow. But investors are equally euphoric about its consumer-facing businesses. A Reliance Jio IPO and Reliance Retail IPO are coming; we just don't know when. Either way, whenever they do come, they should unlock value and send RIL to the moon. 🚀

3) Other triggers: The rest of 2024 has a bunch of potential positive triggers. The first is the LONG-AWAITED telecom tariff hike. Experts say companies are waiting for the elections to get over before biting the bullet. The second is the opening of RIL’s new green energy giga complex in H2-2024. This should pave the way for 20 GW in solar module capacity by FY27. ⚡

Big Picture: Reliance is like a big iceberg. It moves slowly, but a lot is going on underneath the surface. If you forget about that from time to time, as we all do, you could undervalue its potential. Goldman believes we’ll start seeing what it's capable of from 2024 onwards. 💪

Specials

Should You Buy HDFC Bank?

It's no surprise that HDFC Bank has been one of the biggest underperformers in recent years. But, is the worst priced in or is the more pain in the offing? We try to decode this in our recent video where we analyze the company’s fundamentals, technicals, brokerage view and SEBI RAs target.

Stock

Investment Opportunity

ABB India has nearly DOUBLED over the last year vs a 41% gain for the Nifty500 during the same period. Despite the sharp run-up, experts say the party may just be getting started. Here’s why you should keep an eye on this one. 🔍

About company: The firm’s European parent is a global leader in power, electrification and automation products. India is both a key Asian market AND a manufacturing hub for the company. ICYMI - the company’s been firing on all cylinders. In 2023, it reported RECORD HIGH orders at Rs 12,319 cr. Its bottomline also jumped 22% YoY, helped by a strong bump in margins. 📊

But that’s only scratching the surface. FYI - the big sunrise sector for ABB India is artificial intelligence and data centres, which accounts for nearly 3% of global power demand. This is only expected to go up as Asia is the fastest-growing market for data centres. For the unaware, hyperscale capex (which lets a data centre efficiently manage workload) is growing at 25% per annum globally. This is driving huge demand for products from ABB India and its competitors like Schneider or Siemens. On the flip side, supply has barely been able to keep up with demand. Experts say the order lead time has gone up from a few months to TWO YEARS! Suppliers are locking in capacity up to 3 years in advance right now. 💰

When it comes to potential downsides, there aren't too many. Yes, royalty payments to the foreign parent are going up. There’s also a greater dependence on the parent for material sourcing. But the company’s EBITDA margins have shot up high enough for it to be a non-issue right now. 😇

TL;DR: The company’s key verticals like motors & electrification are key growth drivers. A potential gold mine awaits in the form of data centres. All that remains to be seen is whether ABB can execute well enough. FYI - foreign brokerage UBS has a bull case target price of Rs 8,840 p/sh; +40% from current levels! 🤑

Stocktwits Spotlight

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