Tale of the Tape 

Howdy folks. Markets somehow managed to snap their seven-day losing streak!

Nifty and Sensex barely closed in the green after a sharp drop in the final hours of trade. PS - reports of Russia approving the use of nuclear weapons against Ukraine triggered widespread panic. Midcaps (+0.9%) and Smallcaps (+1%) fared much better. The advance-decline ratio was in favour of the bulls (3:2).

Most sectors ended in the green. Real Estate (+1.5%), Auto (+1.4%) and Pharma (+1%) were the top gainers. Metals (-0.9%) and PSU Banks (-0.6%) saw some profit booking.

The disappointing Q2 earnings season is over. Read our top story below breaking down what went wrong and what the future will look like.

NTPC Green Energy’s IPO kicked off today. Check out our analysis below to help you decide whether to subscribe.

PSU stocks were on fire! IRFC, Cochin Shipyard and RVNL rallied +5% intraday. Check out their charts below to find out why.

PSP Projects jumped +15% intraday after reports said the Adani Group was in talks to acquire the firm.

Zee Entertainment (+6%) was in focus after CEO Punit Goenka resigned as managing director of the firm.

Indian Hotels (+2%) hit a new all-time high. The company expects to double its topline in the next 5 years. 

Suzlon was locked in a +5% upper circuit. Global brokerage firm Morgan Stanley increased their 12-month target price to Rs 71 p/sh; +15% from current levels. 

PG Electroplast gained +8% after announcing an EV manufacturing deal with Africa’s largest player.

Results reaction. Waaree Energies dropped -7% on weak Q2 results. Honasa Consumer dropped another -12%, continuing its post-Q2 results fall for a second day.

Here are the closing prints:

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Markets
Q2 Earnings Report Card

India Inc’s Q2 earnings season was disappointing AF! The overall picture wasn’t great, with Nifty 50 firms reporting ONLY a +4% YoY PAT growth. But, the headline numbers also hide just how meh the quarter was. Let’s take a look.

1) Broader weakness: In the BSE 200, Q2 sales growth slowed to +6% YoY (vs +8% in Q1). Nearly 35% of BSE 200 firms reported an EBIT decline YoY. Margins, on average, fell 70 bps YoY. Whew. Within the Nifty 200, 73 companies missed earnings estimates by +5% vs 58 companies in Q1. The overall gloomy picture has led to consensus Nifty earnings cuts of ~3% for FY25/26. PS - this represents the sharpest downgrade in the past five years.

2) Sectors: Industries that disappointed majorly were oil marketing companies/refiners, infra, paints, QSR, consumer electricals and railways. On the flipside, defence, industrials & metals threw up a positive surprise. FMCG was weak; banking was a mostly subdued quarter. IT had a decent show but a clouded outlook didn’t translate into any huge upside.

Big Picture: How will H2FY25 play out? Experts say we can hope for greater GOI spending (capex was down H1 due to election stuff) and robust Kharif & Rabi season (which should result in inflation easing by December). This should broadly remove the macro overhang with a rate cut coming by February. Analysts say this sets up for a MUCH better H2, although lingering weakness in some sectors is not going away.

What sectors should you be looking at? For starters, the most upgrades were seen in realty, telecom & transportation. FYI - Antique Broking is bullish on industrials, defence, real estate, hotels, textiles and PSU banks. Place your bets well!

Stocktwits Specials
Tata Motors Hits A Speed Bump!

Tata Motors is down more than -30% from its all-time highs! What are the factors behind this correction and should you buy the dip? We address these questions + the views of market experts on the stock in our latest YouTube video. Miss it at your own cost!