Tale of the Tape 

Howdy folks. Happy Friday! 🥳 

Nifty and Sensex cooled off from the day’s highs to end flat. Midcaps ended flat too, while Smallcaps (-0.1%) closed with minor cuts. The advance-decline ratio was in favour of the bears (3:2). 📉 

Most sectors ended in the red. FMCG (-0.8%), Real Estate (-0.7%) and IT (-0.6%) witnessed selling pressure. Oil & Gas (+0.5%) and Banks (+0.4%) saw some buying. 💸 

Is it time to bet on India’s telecom sector? Read our top story below to find out whether you should pull the trigger. 🔍️ 

Ashok Leyland (-1%) had an okay-ish Q4 show. Meanwhile, Indigo fell -3% despite great Q4 numbers. More details below. 📊 

Laurus Labs (-2%) was down after its Andhra Pradesh unit received a warning letter from the USFDA. 🚨 

Adani Ports (-2%) was the top Nifty loser after 1.06 cr shares (0.5% equity) changed hands in a block deal; reports say a strategic investor was the likely seller. 👀 

Results reaction. Honasa Consumer rallied +7% intraday after reporting its highest-ever quarterly profit for Q4. Meanwhile, Bayer CropScience fell -6% after its Q4 net profit fell -40% YoY. 👎️ 

Inox Wind was up +9% after the stock traded ex-bonus. ICYMI - it had a 1:3 bonus share issue. ✅ 

Aurionpro Solutions rallied +5% intraday after signing a global strategic partnership agreement with Fime. 🤝 

Cheviot (-6%) will buy back shares at Rs 1,800 p/sh; +23% from current levels. 💰️ 

Here are the closing prints: 

Stocks
Telecom Turnaround

Is India’s telecom sector on the verge of a MAJOR inflection point? Brokerage upgrades are being handed out left and right. Vodafone-Idea has jumped +16% over the last month, while Bharti Aitel is up +37% YTD. 📈

So what’s changed? Well, Airtel and Jio have stabilised and are doing OK after a lot of chaos. Vodafone has just pulled off a successful FPO. But most importantly, almost all experts are projecting telecom tariff hikes of up to 20% post-elections. ICYMI - the last time companies hiked rates was way back in 2021! What you really care about though: who should you bet on? 🎯 

1) Vodafone-Idea: Analysts say the risk is high here, but the reward is too. The bull case here depends on a minimum 10%-12% hike in FY25 and then one more next year. It also banks on the GOI waiving a MINIMUM of 50% of the dues that Vodafone owes it. This is in addition to major capex expansion and successful 5G rollout. FYI - UBS has one of the biggest price targets on the stock at Rs 18 p/sh right now. 🤑

2) Indus Towers: If Vodafone succeeds, the picture looks a LOT better for Indus Towers. Not only because VI owes them a lot of money, but because competition has shrunk the firm’s topline. ICYMI - the company’s average rental revenue from each tower has DROPPED from FY21 to FY23. More competition + higher tariff hikes = super positive for Indus Towers. FYI - CLSA sees a 29% upside from current levels! 🔥

3) Bharti Airtel: The risk here is lowest, but so is the upside. Airtel has been the clear winner of the last decade. Its liabilities aren’t life-threatening, it fended off Jio well and has industry-high ARPUs. The only problem? Its valuations are slightly on the high side. The biggest bull, Motilal Oswal, has a price target of Rs 1,570 p/sh or +13% upside. 🛜

Earnings

Earnings Roundup

Interglobe Aviation’s Q4 results beat Street estimates. Strong aviation demand boosted the total number of passengers up 14% YoY to hit 26.7 million. This was also the airline’s SIXTH straight quarter of overall profitability and FY24 was the first full year of profits since the Covid-19 pandemic. That’s INSANE. If Q4 was so great though, why did the stock end down -3%? Answer: profit-booking. ICYMI - Indigo is up a whopping +88% over the last year. 🚀

Big Picture: The airline had some surprises in its earnings call, including the launch of business class seats later this year. FYI - most analysts are super bullish on Indigo. Morgan Stanley has a new target price of Rs 5,142 (+21% from current levels). It believes new loyalty programmes, long-haul international flights & business class seats are all positive triggers. ✅

Here are its key stats:

• Revenue: Rs 17,825 cr; +26% YoY

• EBITDAR: Rs 4,412 cr; +49% YoY

• EBITDAR Margin: 24.8% vs 20.9% YoY

• PAT: Rs 1,895 cr; +2x YoY

Interglobe Aviation is +43% YTD.

Ashok Leyland’s Q4 results were mostly in line with Street estimates. Muted demand across verticals led to a small decline in its topline. Lower commodity & employee costs aided margins & profitability. 📊

Big Picture: Despite a meh Q4, Ashok Leyland ends FY24 on a decent note. The company has hit double-digit margins for the full year after four years. It also gained market share in its key MHCV segment. That said, most experts believe the future of the commercial vehicle industry will be cloudy for FY25. 👀

Here is its Q4 report card:

• Revenue: Rs 11,267 cr; -3% YoY (vs Est: Rs 11,275 cr)

• EBITDA: Rs 1,592 cr; +25% YoY 

• EBITDA Margin: 14.1% vs 11% last year

• PAT: Rs 900 cr; +20% YoY (vs Est: Rs 920 cr)

Ashok Leyland is +42% over the last year.

Charts

Movers and Shakers

Here’s a look at this week’s top NSE 500 movers and losers! A strong Q4 show + bullish market sentiment around PSU defence stocks pushed Garden Reach Shipbuilders and Engineers (+47%) to the top. 📈 Right on its heels is Bharat Dynamics at 47%, which zoomed ahead of its stock split today. On the flipside, Global Health cracked -16% after experts raised concerns over slow margin expansion + high valuations. Delhivery fell -10%, after a weak Q4 show. Check out their charts below: 🔥

Links That Don’t Suck

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🕺 How to use your fear of death to live your best life, according to a psychology expert

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