Tale of the Tape 

Hola Amigos! Markets were back in the green. Today’s movement tracks a rise in global markets following soft US inflation data. Will it trigger a Fed rate cut in September? Fingers crossed! Broader markets were up too with Midcaps (+0.6%) and Smallcaps (+0.7%) seeing buying. The advance-decline ratio was in favour of the bulls (3:2).  

Most sectors ended higher or were flat. Pharma (+1.7%) led the rally, followed by Metals (+1.3%) and Auto (+1.1%).

In today’s issue of the Daily Rip, we break down the recent triggers driving Paytm’s rally, look at Honasa Consumer’s turnaround Q1 and Samvardhana Motherson’s tariff optimism, and cover the biggest newsmakers of the day.

Honourable mentions: 

IndusInd Bank (-1%) was in focus after the Mumbai EOW started a probe into the lender’s accounting lapses. Meanwhile, Premier Explosives jumped +20% after a blockbuster Q1 show.

Check out the NSE 500 heatmap:

Stock
Paytm At 3-Year High!

Paytm has been KILLING it! The stock has more than doubled over the last year, making it among the top performers of the new-age tech firm herd. At Stocktwits, we’ve been flagging the rally for a while now, but here’s a quick rundown on the most recent triggers at play.

The big headline today is the RBI granting Paytm an in-principle license to operate as an online payment aggregator. ICYMI - the central bank had rejected the company’s application way back in 2022. That was mostly due to concerns over the company’s Chinese ownership. But with Antfin completely exiting the company earlier this month, the decks were made clear for the RBI’s approval. PS - with the regulator’s nod, restrictions placed on merchant onboarding have also been lifted. This should pave the way for future growth and make Paytm competitive once again among smaller merchants. But tbh, the bigger win is the RBI seeing Paytm as trustworthy again which removes a MAJOR regulatory overhang. Little wonder the stock hit a 3-year-high today!

This news builds on Paytm’s slow, but solid financial turnaround over the last year. For the unaware: the RBI effectively nuked Paytm’s payments bank back in Jan 2024. But since then, the company has stemmed the loss of users, rebuilt its payments & loan business and cut expenses in a big way. All of this resulted in the company reporting its first-ever quarterly profit in Q1FY26!

Big Picture: The Paytm turnaround is real. But experts say with its recent rally, future upside may be limited for a while. Most current price targets project a ~6%-8% upside, with the highest estimate from Dolat Capital seeing a +19% rally from current levels.

Specials
India’s Biggest Company Trading At A Discount

After giving negative returns in calendar year 2024, Reliance Industries is trading at a huge 15% discount to its 5-year average valuations. Can RIL reverse this underperformance? What are the factors at play and analyst recommendations? Find out in our latest YouTube video, all in under 5 minutes!