Tale of the Tape 

Hiya everyone. Nifty scaled Mt 25k today FINALLY after teasing us for the whole week! PS - the 24k to 25k journey took just 24 trading sessions, the third-fastest 1,000-point rally.

Markets again failed to hold on to their morning gains, with the Nifty and Sensex ending with minor gains. Midcaps (-0.9%) and Smallcaps (-1%) didn’t have a great day though. The advance-decline ratio was in favour of the bears (3:2).

Most sectors ended in the red. Energy (+2%) was the top winner, while FMCG (+0.2%) saw minor gains. Real Estate (-1.7%) and PSU Banks (-1%) witnessed the most selling.

Coal India gained +3% after its Q1 beat all estimates. Maruti (+2%) had a solid Q1 show too. More details below.

Ceigall India’s Rs 1,253 cr IPO kicked off today! Read our analysis below to help you decide whether to subscribe.

Adani Energy Solutions, KRBL and Sonata Software all saw big movements today. Check out their charts below to find out why.

Infosys was in focus after receiving a MASSIVE Rs 32,403 cr tax notice from the GST authorities! PS - the firm says there is no evasion and that it does not need to pay tax on the services mentioned in the notice.

Restaurant Brands Asia was up 3% after 1.5 cr shares (2.8% equity) changed hands in a block deal; the buyers and sellers were not immediately known.

Kotak Mahindra Bank was in focus after reports said it got RBI ‘fit and proper’ approval to acquire IDBI Bank. Fairfax and Emirates NBD are two other suitors.

PCBL was up +7% after promoter Sanjiv Goenka said its profit could jump 5X in the next few years.

Results reaction. Aster DM Healthcare (+6%) gained after its topline jumped +24% YoY. Adani Enterprises was up +2% after its profit zoomed +116% YoY.

Here are the closing prints:

Earnings
Earnings Roundup

Maruti Suzuki (+1%) Q1 results beat Street estimates! Volumes were up only +5% YoY, with the firm clocking its slowest sales growth in five quarters. Despite that, Maruti still reported double-digit topline growth due to higher SUV sales, which grew +29% YoY. Fun fact: SUVs now make up 31% of Maruti’s sales vs 25% last year. Finally, cheaper raw material costs, favourable forex moves & strict cost control measures boosted margins and the bottomline!

Big Picture: Auto sales have slowed down in Q1 for most of the industry, as elections, muted consumer spending and the heatwave hurt growth. But sales of bigger cars + favourable macros are carrying the day. Future triggers to watch out for this year include Maruti’s launch of a new EV vehicle!

Here is its Q1 report card:

• Revenue: Rs 35,531 cr; +10% YoY (vs Est: Rs 34,565 cr)

• EBITDA: Rs 4,448 cr; +49% YoY (vs Est: Rs 3,986 cr)

• EBITDA Margin:12.5% vs 9.2% last year

• PAT: Rs 3,650 cr; +47% YoY (vs Est: Rs 3,272 cr)

Maruti Suzuki is +29% YTD.

Coal India (+3%) Q1 results comfortably beat Street estimates! A decline in employee costs helped the PSU miner deliver its highest-ever quarterly EBITDA and net profit! Meanwhile, volumes grew 6% YoY aided strong power demand, due to the heatwave.

Overall, a solid picture. The only slightly sour note is that its ‘offtake’ or the amount of coal sold or committed to be sold rose +5.5% YoY, lagging slightly behind a +7.9% YoY growth in production. FYI - when demand is high, lower offtake usually signals logistical problems.

Here are its Q1 stats:

• Revenue: Rs 36,465 cr; +1% YoY (vs Est: Rs 36,021 cr)

• EBITDA: Rs 14,339 cr; +6% YoY (vs Est: Rs 10,173 cr)

• EBITDA Margin: 39.3% vs 37.7% last year

• PAT: Rs 10,944 cr; +4% YoY (vs Est: Rs 7,654 cr)

Coal India is +42% YoY

Spotlight

SEBI RA Spotlight

Auto stocks are on fire and Orchid Research’s top pick from the space is Ashok Leyland. The stock broke out to a new all-time high in yesterday’s trading session. Options data also suggests that strong momentum going forward. Short term traders can expect to see the levels of 275 in the next 2-3 weeks, according to Orchid Research. 

FYI - Apurv Pandey is a Full-time FNO Trader and Co-founder of OrchidBlu Investment Advisory LLP. Apurv posts content related to short term swing trading, options trading and long term multibagger stock ideas on Stocktwits. Follow him for more amazing insights and add $ASHOKLEY.NSE to your watchlist and track the latest from the community. 

IPO

Ceigall India IPO Review

Ceigall India IPO opened for subscription today! The price band is fixed at Rs 380-401 p/sh. The company aims to raise Rs 1,253 cr.

Founded in 2002, Ceigall is an infrastructure company that focuses on roads, highways, flyovers and tunnels. It got its first big order in 2006 and hasn’t looked back since then. As of March 2024, it had constructed over 1,740 kms of roads and highways. The EPC (engineering, procurement & construction) segment accounts for 66% of its topline, while another 26% is handled through a hybrid annuity model. Ceigall’s current order book is Rs 9,471 cr; 3.1x its FY24 revenue, providing solid medium-term revenue visibility!

FYI - The IPO is mostly a fresh issue of shares (Rs 684 cr), with the rest being done through the ‘Offer for Sale’ route (Rs 568 cr). The money raised will be used to repay debt and fund new equipment purchases.

FY24 snapshot:

• Revenue: Rs 3,029 cr; +46% YoY

• EBITDA: Rs 518 cr; +75% YoY

• EBITDA Margin: 17.09% vs 14.29% YoY

• PAT: Rs 304 cr; +88% YoY

Big Picture: Ceigall has been riding the GOI’s big infra boom, with its topline growing at a 50% CAGR between FY21 and FY24. That said, receivables remain a problem, something that affects most construction firms tbh. Also, while Ceigall has projects in 10 states, it’s still heavily Punjab-focused, with over 50% of its topline coming from just one state. This could cap its future growth potential and also exposes the potential political risks! The IPO pricing is on the slightly expensive side, but current grey market data suggest it may list at a +20% premium!

Charts

Chartbusters

Here are three companies that saw big movements today!

1) Adani Energy Solutions hit a 52-week-high after its $1 billion QIP was subscribed 3x! FYI - this is the first big public fundraise since the Hindenburg scandal and was seen as a litmus test of sorts for the Adani group. The QIP saw participation from some marquee FIIs including the Qatar Investment Authority and US billionaire investor Stanely Druckenmiller’s family office.

2) KRBL cracked -8% intraday after its Q1 net profit more than HALVED YoY. Its topline and operating margins also saw a big hit. ICYMI - KRBL and other rice stocks have been hit hard by the GOI’s export ban for almost a year now. Rough stuff.

3) Sonata Software slumped after its Q1 results disappointed investors. The firm’s bottom line declined -4% QoQ, but both the topline and deal wins were decent! Overall numbers were in-line with most estimates, but investors are expecting an IT revival right now. Anything less than that doesn’t make the cut.

Check out their charts below:

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