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New Week New Opportunities
Yash Upadhyaya
February 26, 2024
Tale of the Tape
Hiya everyone. Welcome back to the market of stocks! 👋
Sensex (-0.5%) and Nifty (-0.4%) closed down, dragged by the selling pressure in heavyweight banks and IT stocks plus weak global cues. Midcaps (-0.4%) and Smallcaps (-0.3%) followed suit. The advance-decline ratio was in favour of the bears (3:2). 📉
Most sectors ended in the red. IT (-1.1%), Metals (-0.9%) and Banks (-0.5%) were the top losers. Auto (+0.1%) and Oil & Gas (+0.1%) stocks ended with minor gains. 👎
How will Reliance-Disney India’s merger shake up the market? Has Paytm finally bottomed out? Also, why are railway stocks up today? Get all the important deets below. 🤓
Exicom Tele-Systems Rs 429 cr IPO opens tomorrow. Read our analysis below to help you decide whether to jump in. 🔍
Alkem Laboratories cracked 7% after reports said tax officials found “large-scale” evasion; the company has denied the reports.🚨
Brokerage action. Asian Paints (-4%) was the top Nifty loser after CLSA issued a ‘sell’ call on the stock; it sees a 19% downside. Larsen & Toubro was the top gainer on the Nifty after getting a buy rating from CLSA; the brokerage sees another 28% upside from current levels. 🚀
Rain Industries was the top loser on the NSE 500 after posting a weak set of Q4 results. 📊
Adani Energy Solutions jumped 9% after reports claimed the group was in talks with Uber to roll out an EV cab fleet service. ⚡
Skipper (+3%) has won a Rs 737 cr transmission line project order from the Power Grid Corporation of India. 💰
GPT Healthcare IPO sailed through on the final day of bidding. 💯
Here are the closing prints:
Nifty | 22,122 | -0.4% |
Sensex | 72,790 | -0.5% |
Bank Nifty | 46,577 | -0.5% |
Stocktwits Alert 🚨🚨🚨
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Stock
Heard On The Street
🍿 An Indian entertainment powerhouse may be born this week! Reports say that Reliance Industries and Disney’s India unit will announce their merger soon. FYI - the combined entity will be HUGE, controlling +40% of the TV market for entertainment & sports. With the Zee-Sony merger having fallen apart, there’s nobody left to challenge RIL and Disney.
The merger announcement also comes at a time when both of their streaming services are facing problems. Disney Hotstar has been in a downward slump losing IPL rights (to RIL), HBO content (again to RIL) and falling subscribers. Finally, while Jio Cinema has been pulling numbers, it barely has any original content and no solid monetisation model yet.
Details are still scarce about ownership and structure. Some reports say RIL will own 61% and infuse another $1.5 billion into the venture. Valuations may also be a potential sticky point. Watch out for this one!
🤞 Paytm hit a 5% upper circuit again today! The stock is up 14% over the last week after its MASSIVE fall earlier this month. All experts warn you not to catch a falling knife, but it looks like Paytm has stabilized for now.
What’s changed? There’s a bunch of semi-positive factors at play. For starters, the RBI gave the payments bank some breathing room till March 15 allowing them to transition customers without sparking panic. Paytm was also quick to transfer its ‘nodal’ accounts to Axis Bank and sign up with HDFC for services like FasTag. Then, there were worries over an Enforcement Directorate (ED) probe, but now reports say the investigative agency has found no forex violations! Finally, the RBI is now considering allowing Paytm to continue operating UPI services as a third-party app. Not too bad!
That said, let’s be real. There’s a LOT more to be done for Paytm to recover. But not everyone has lost hope. ICYMI - Morgan Stanley bought a near 1% stake in Paytm earlier this month for Rs 244 cr. All of this has helped partly boost sentiment. Is it enough? We’ll find out.
🔥 Railway stocks saw a nice bump today. RailTel, IRCON, RVNL and IRCTC were up 2%-4%. Why? PM Narendra Modi will inaugurate roughly 2,000 railway infra projects worth Rs 40,000 cr across the country.
FYI - a big part of this is the redevelopment of 553 railway stations for over Rs 19,000 cr. Revamping stations has a multiplier effect: it (obviously) helps firms that do the construction, but also in general boosts rail travel as it makes the journey more attractive & accessible.
Railway stocks have seen an INCREDIBLE run over the last year. But, more recently, have come off from their record highs as investors wait for orders & earnings to catch up to valuations. So it always helps when the market is reminded of how much the GOI is investing into the sector.
SPECIALS
Should You Buy The Dip In IRFC? 🚅
IRFC has surged 8x in the past year. At 150-ish the stock is down slightly from its all-time highs. So, should you buy the dip? 🧐
Check out our latest video where we break down all the key updates on IRFC, covering both fundamental and technical analysis. Also, get to know SEBI RAs’ views on the stock. 👇🏻
IPO
Exicom Tele-Systems IPO Review
Exicom Tele-Systems IPO opens for subscription tomorrow! The price band is fixed at Rs 135-142 p/sh. The company aims to raise Rs 429 cr from the markets. 💸
Founded in 1994, Exicom is a power management solutions provider. The firm has two main biz verticals. Its traditional cash cow has been making ‘critical power solutions’ for sectors like the telecom industry (~70% of FY23 revenue). But what’s got everyone excited is its electric vehicle (EV) chargers business, where it offers smart systems for residential, business and public charging. It has a 60% market share in the residential EV charging market and a 25% market share in the public charger space. It also makes EV chargers for automakers like M&M and MG Motor, and public + fleet chargers for Reliance Jio, Blu Smart Mobility and Fortum Charge. ⚡
FYI - the IPO’s fresh issue of shares comes out to Rs 329 cr, while the rest is through the ‘Offer for Sale’ route. Nearly half the funds raised will be used to set up a new manufacturing unit in Hyderabad. 🏭
FY23 Snapshot:
Revenue: Rs 708 cr; -16% YoY
EBITDA: Rs 52.4 cr
EBITDA Margin: 7.4% vs 8.1%
PAT: Rs 31 cr; +3% YoY
Big Picture: Experts say that Exicom is a great way to tap into the EV play. Its consumer-facing EV charging biz grew from just 8% of the topline in FY21 to 30% in FY23. Finally, the EV charging infra industry is estimated to grow 6x-7x by FY28 (vs Rs 1,300-Rs 1,400 cr now). That’s INSANE. Finally, its core cash cow of supplying critical power solutions remains strong as well. All that remains is whether it can execute. FWIW - the IPO is reasonably priced and current grey market data suggests it may list at a WHOPPING 92% premium. 🤑
Stocktwits Spotlight
One question we always struggle with is- Is it the right level to buy? Get all your queries answered around your fav stocks. Join in for a fun AMA with Shubham Satyartha, a SEBI-registered RA. Drop in all your questions here:
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