- The Daily Rip India by Stocktwits
- Posts
- Pre-Election Rally?
Pre-Election Rally?
Yash Upadhyaya
April 10, 2024
Tale of the Tape
Hiya everyone. Markets extended their unbeaten streak. 📈
Nifty and Sensex ended up +0.5% each, closing at record highs. Midcaps (+1%) and Smallcaps (+0.7%) moved in sync. The advance-decline ratio was in favor of the bulls (3:2). 💪
Most sectors ended in the green. PSU Banks (+1.5%), Oil & Gas (+1.5%), FMCG (+1.2%) and Metals (+1.2%) saw strong buying. Pharma (-0.3%) and Auto (-0.1%) witnessed minor cuts. 🔥
What’s helping fuel Vedanta’s recent bull rally? Read our top story for all the deets. 🚀
Vodafone-Idea is back with a fundraising plan. But will it be enough? More details below on why CLSA sees a -60% slide in the stock. 🚨
Ramco Systems was locked in a 20% upper circuit after signing an engine support deal with Korean Air. ✈️
BPCL was up +3% after global Brent crude prices slipped below $90 a barrel. 🛢️
Sun Pharma Advanced Research hit a 5% lower circuit after halting its Parkinson’s drug trial. 💊
Tata Chemicals (+3%) was up after soda ash prices hit a 2-month-high. 👍
Kolte-Patil Developers gained +7% after Motilal Oswal initiated coverage on the stock; the brokerage sees a +27% upside from current levels. 🤑
PB Fintech rallied +7% intraday after announcing a partnership with ICICI Lombard for insurance solutions. 🤝Hiya everyone. Markets extended their unbeaten streak. 📈
Here are the closing prints:
Nifty | 22,754 | +0.5% |
Sensex | 75,038 | +0.5% |
Bank Nifty | 48,987 | +0.5% |
Stock
Go Big or Go Home
Vedanta is back with a BANG! The stock is up +73% from its September 2023 lows, when everything seemed doom and gloom. But is it just hype or have things changed fundamentally? Let’s dive right in. 😎
The Past: Vedanta has massive debt issues due to years of overexpansion and needless acquisitions. As of Dec 2023, it stood at around $9 billion. Things hit an all-time low when Moody’s downgraded its debt in Sept 2023. Rumours started quickly spreading that Anil Agarwal couldn’t make his next interest payment. This is when Vedanta said it would demerge its conglomerate into six listed subsidiaries to unlock value + reduce debt. 📊
The Present: What’s happened since then? Firstly, Vedanta repaid a $894 million bond interest payment in Feb 2024 without any major delays. This reduced any worry that Vedanta would go full bust. Importantly, this coincided with a sharp pick-up in the global commodity market after two years of underperformance. FYI - China’s factory activity expanded in March 2024 for the first time in six months! China is a huge buyer + exporter of metals and its recovery is good news for the sector. 💰
The Future: There are a bunch of potential triggers for Vedanta, but we have no idea how it will unfold. If interest rates are cut globally, it could help bring down the conglomerate’s debt burden. If the Vedanta restructuring goes well and all listings see a great response, it could be just the thing it needs. If China recovers by 2024-2025, its businesses could start booming again. You get the drift… There are a lot of ‘ifs’ at play here. 👀
FWIW - CLSA is super bullish and upgraded the stock to a “buy”. It says Vedanta is well placed to benefit from the commodity upcycle and projects its EBITDA to jump 50% in the next 2 years to $7.5 billion. They also have a fresh target price of Rs 390 p/sh; +6% from current levels. ✅
What’s your view on the stock? |
Specials
Zomato - Buy Now Or Wait For A Dip?
Zomato is on fire! The stock has nearly 4x in the past year to hit a new all-time high of Rs 194 p/sh! But, is it still a buy at current levels or should you wait for a dip?
Check out our latest video where we break down all the key updates on Zomato, covering both fundamental and technical analysis. Also, find out SEBI RAs’ views on the stock. 👇🏻
Stock
VI: Tough Sell
The Vodafone-Idea gamble is finally here. After a year of waiting, things are finally moving on the fundraising front. FYI - VI will first raise Rs 2,075 cr from promoters Aditya Birla Group. This comes a little before its massive ~Rs 20,000-cr FPO that will be launched next week according to reports. 💸
This will be the biggest FPO after Yes Bank’s Rs 15k cr FPO back in 2020. That said no banks will be underwriting VI’s issue. Overall, this is the first step in the telecom firm’s plan to raise Rs 45,000 cr. The rest will likely be raised through debt at a later stage. Once this is done, the company hopes to hit Rs 75,000 cr in revenue by FY26, add 10.5 million subs a year and hike tariffs by 20%-25%. 🤔
The only problem? None of those goals are realistic at all. First off, there’s INSANE competition: Airtel is at the top of its game, while Jio just crossed 100 million 5G users. Secondly, even if VI manages to raise Rs 45,000 cr that’s just the amount of money it needs to survive. It will need a LOT more to grow. Finally, how on earth does VI plan to raise tariff hikes when it's losing millions of subscribers and its reputation has hit an all-time low? Asking for more money from users that want to leave you doesn’t seem like a good idea. 👎
FYI - CLSA doesn’t buy into the VI hype at all. It has a new target price of Rs 5 p/sh; a -61% fall from current levels! 🤯
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 Artha Capital, a SEBI-registered advisor. Drop in all your questions here:
Links That Don’t Suck
Get In Touch
Have feedback on The Daily Rip India? Let me know using the poll below or email me (Yash Upadhyaya) at [email protected]!
How did you like today's newsletter? |
Want to sponsor this newsletter and reach hundreds of thousands of passionate investors and traders? Reach us here.
Disclaimer: Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. Read the full terms & conditions here.
