Tale of the Tape 

Howdy folks. Welcome back to the Daily Rip!

Nifty and Sensex cooled off in the last hour of trading after hitting RECORD highs. Midcaps (+0.6%) and Smallcaps (+0.8%) had a solid day though. The advance-decline ratio was evenly split.

It was a mixed-bag kinda day for sectors. PSU Banks (+1.3%), Real Estate (+0.8%) and IT (+0.5%) saw some gains. Metals (-0.6%) and Oil & Gas (-0.5) saw some profit-booking.

Divi’s Laboratories was the top Nifty gainer after its Q4 numbers beat Street estimates. Meanwhile, Glenmark Pharma jumped +8% on bullish FY25 guidance.

Jefferies sees a +12% upside in this airport stock. Read our story below to find out more.

Nazara Technologies, Aurobindo Pharma and Cochin Shipyard all saw big movements today. Check out their charts below to find out why.

Wipro (-2%) fell after the BSE announced it was removing the stock from the Sensex.

RVNL rallied +8% intraday after bagging  a Rs 187 cr project for the Nagpur Metro.

ITC (-1%) was in focus after a shareholder advisory firm said to vote against the firm’s hotel demerger proposal.

MM Forgings (+12%) will consider issuing bonus shares on May 29.

Results reaction. Torrent Pharma rallied +8% intraday after a strong Q4 show. Meanwhile, Karnataka Bank was down -2% after reporting weak Q4 margins.

Here are the closing prints: 

Earnings
Earnings Roundup

Divi’s Laboratories (+4%) Q4 results beat Street estimates on all fronts! Its ‘custom synthesis’ biz jumped +46% YoY to help boost the overall topline. FYI - this offset a weak performance in its generic segment, which fell -7% YoY due to pricing pressures. Lower raw material costs + a higher-value product mix aided margins & the bottomline. Fun fact: EBITDA margins crossed  the 30%-mark after five quarters! 📊 

Here are its stats:

• Revenue: Rs 2,303 cr; +18% YoY

• EBITDA: Rs 731 cr; +54% YoY

• EBITDA Margin: 31.7% vs 25% YoY

• PAT:  Rs 538 cr; +67% YoY

In its earnings call, Divi’s said it was signing a “long-term supply agreement” with an MNC. This contract is big enough for Divi’s to spend Rs 650-Rs 700 cr towards capacity expansion and will commence operations by January 2027. FYI - InCred is upbeat on the stock and has raised its target price to Rs 4,707 p/sh; +10% from current levels. 📈

Divi's Laboratories is +10% YTD.

Glenmark Pharmaceuticals (+8%) hit a fresh 52-week-high on bullish management commentary. FYI - the company says it's targeting double-digit profit and revenue growth in FY25. It’s also projecting margins to expand to 19% vs ~16% currently. Whether this optimism will translate into actual results, we’ll have to wait and see. But it's what the stock needed after Glenmark reported a very meh Q4FY24 earnings result. 

The company’s losses widened mostly due to major impairments booked + a Rs 300 crore US DOJ settlement. Fun fact: this impact was so huge it offset the Rs 5,140 cr it got from selling its stake in Glenmark Life! That said, its margins continued to remain a bright spot as pricing pressures eased in the US!

Here are its Q4 stats:

• Revenue: Rs 3,063 cr; +2% YoY

• EBITDA: Rs 504 cr; +27% YoY

• EBITDA Margin: 16.5%  vs 13.3% YoY

• Loss: Rs 1,239 cr vs Rs 549 cr loss YoY

Glenmark Pharma is +31% YTD.

Stock

Take Off Initiated

GMR Airports Infrastructure has been KILLING it. The stock has more than doubled over the last year, easily beating the Nifty Midcap 100 Index. But is the bull run for infra stocks over, or is there more juice left in the tank? 🤔

For the unaware: GMR is one of India’s biggest private airport operators. FYI - it’s in charge of two of the top 5 busiest airports, Delhi and Hyderabad, and has a 27% market share in passenger traffic. ✈️

What’s popping? There are both micro and macro positive triggers at play. Firstly, analysts project aero traffic in Delhi to TRIPLE in the next 4 years, while the passenger cap at Hyderabad will jump from 12 to 34 million. There are also projected tariff hikes at both Hyd and Goa airports which will contribute to the topline. 💰

Beyond that, what investors are betting on is a “retail consumption play”. A decade ago, India’s airports were unappealing transit zones. Since then, at least in some major cities (Delhi, Mumbai, Bangalore and Hyderabad), they’ve upgraded quite a bit. With a rise in incomes and a higher share of foreign passengers, the hope is that spending in duty-free areas should increase from the current $8-$12 to the global average of $25-35. The monetisation of internal real estate should also free up new revenue streams. FYI - this is where ADP’s expertise should help the firm boost its non-aviation revenue. 🛍️

Big Picture: Higher passenger traffic, hiking tariffs and improving non-flight revenue streams are all key positive triggers. Potential downsides include the GOI interfering through regulation and of course competition from the Adani Group. PS - Jefferies has a target price of Rs 100 p/sh.; +12% from current levels. 🔥

Charts

Chartbusters

Here are three companies that saw big movements today:

1) Nazara Technologies hit a fresh 52-week-high after 48.84 lakh shares (a whopping 6.38% stake) changed hands in a block deal. The promoter was the seller, who was looking for ‘liquidity’.  Either way, it removes an overhang on the stock, with the promoter saying they have no further plans to sell. In TV interviews, the management has also guided for their real gaming biz to grow +30% over the next 2-3 years! 🎮

2) Aurobindo Pharma slumped after it said its Eugia Pharma unit in Telangana received an ‘official action indicated’ tag from the USFDA. This comes just weeks after its Rajasthan unit got 7 observations from the FDA too. This ended up being a mood-killer, despite the company reporting solid Q4 results and other pharma stocks rallying today. 💊

3) Cochin Shipyard rallied +10% intraday after a solid Q4 show. Its net profit jumped SIX-FOLD on the back of quicker project execution and lower raw material costs. PS - the PSU firm has had an amazing 2024 so far, with the stock more than DOUBLING. 🚀 

Check out their charts below:

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