Tale of the Tape 

Howdy folks. Markets ended higher for a fourth straight day! 📈

Nifty and Sensex ended barely in the green after a sharp cool-off in the final trading hour. Midcaps were up +0.8% while Smallcaps rose +0.4%. The advance-decline ratio was in favour of the bulls (3:2). 😎

It was an even mix of red and green for sectors. Metals (+2.7%) were the top winners while Real Estate (+0.9%) and Pharma (+0.7%) saw decent gains. IT (-0.8%) continued to drag lower. 💸

Are top Wall Street trading firms winning at the expense of millions of young Indian options traders? Read our top story below. 👀

Tata Consumer Products (-5%) was the top Nifty loser after a disappointing Q4. Meanwhile, Cyient DLM jumped 5% on strong results. More details below. 📊

Chennai Petroleum, MCX and Tata Elxsi all had big movements today. Check out their charts below to find out why. 🔥

Cipla (+4%) gained after Investec initiated coverage on the stock; the brokerage sees a +11% upside from today’s close. 🤑

Dixon Technologies was up +5% after reports claimed it has finalised a contract manufacturing agreement with Reliance Industries. 📱

Indus Towers (-3%) fell after Bharti Airtel clarified that it had no plans to buy out Vodafone Plc’s stake in the firm. 🛜

Zydus Lifesciences fell -3% after the FDA issued 10 observations for its Vadodara unit. 🚨

Puravanakara was locked in a +5% upper circuit after bagging a Rs 2,000-cr Pali Hill redevelopment project. 🏗️

Here are the closing prints: 

Markets
Choose Your Battles Wisely

Here’s an easy riddle. Millions of young Indians vs a top Wall Street high-frequency trading firm facing off against each other in India’s crazy options market. Who wins? A legal battle in the US revealed that the Jane Street Group allegedly made $1 billion PROFIT by trading in Indian derivatives in 2023. This is INSANE. 🤑

For the unaware, India’s option market has BOOMED but most retail traders aren’t making money. SEBI says 9 out of 10 F&O traders made losses (an average of Rs 1.1 lakh) in FY22. So how did Jane make so much money? 📈

In court, the firm said their options strategy took them five years, “significant resources” and “substantial capital” to create a sophisticated system of analysing signals to “predict future market activity”. Compare this to some Indian teenager sitting in a Tier 2 city with Rs 10,000 clicking away at some buttons on Zerodha. 🤕

FYI - we’ve known for some time that HFT dominates the battlefield. Over 60% of India’s derivative bets were done using HFT strategies in FY24. But when retail investors are getting bled, it doesn’t look pretty. Even worse, it's encouraged by all parties that should be protecting India’s retail investors aka the GOI, SEBI and market intermediaries like NSE. 👎

Big Picture: Look, nobody is trying to argue that markets should always be fair. Exploiting a market’s inefficiency is a legit way of making money. In the US options market, retail investors make up an even higher share than in India and they are (mostly) OK. That said, the financial literacy of India’s new investors is quite low. One could even argue that our institutions need to help out a little till our market matures. But it doesn’t look like anyone’s listening. 🙉

On a completely related note, the NSE announced that there will be NO transaction charges on Nifty Next 50 F&O contracts for the next six months. Khelo India Khelo!!! 🎰

Specials

Yes Bank: 5-Minute Review!

Want to know the latest updates on Yes Bank share? Check out our latest video where we break down all the key updates on Yes Bank, covering both fundamental and technical analysis. Also, find out SEBI RAs’ views on the stock. 👇🏻

Earnings

Earnings Roundup

Tata Consumer Products (-5%) Q4 results missed Street estimates. Strong double-digit growth in its food biz helped lift the top line a bit. FYI  - the company’s crucial packaged beverage vertical was flat though (~2% YoY growth) which contributed to the overall revenue miss. Margins were up, aided by a cool 34% YoY jump in its ‘value added’ salt portfolio. But a big, one-off exceptional loss of Rs 215 cr dragged down the bottomline. FYI - the company has recommended a final dividend of Rs 7.75 p/s for FY24. 💸

Here is its Q4 report card:

• Revenue: Rs 3,927 cr; +8.5% YoY (vs Est: Rs 3,991 cr)

• EBITDA: Rs 630 cr; +23% YoY (vs Est: Rs 601 cr)

• EBITDA Margin: 16% vs 14.1% YoY

• PAT: Rs 268 cr; +22.5% YoY (vs Est: Rs 315

Despite the stock falling, most experts remain bullish, citing improved margins. Its recent acquisition of Capital Foods will take some time to digest. Analysts say wait for a few quarters to see the synergies kick in. 📊

Tata Consumer is up +53% over the last year.

Cyient DLM (+5%) posted a strong set of Q4 numbers! Robust growth in key aerospace & defence segments helped boost the topline. Higher employee and ESOP expenses took a bite out of the margins. But the overall revenue growth still saw it log a strong jump in the bottomline. While its order book as of March 2024 came in at Rs 2,170 cr, -5% QoQ, the company expects conversion of contract wins to be stronger in FY25. 💪

Here is its Q4 report card:

• Revenue: Rs 362 cr; +30% YoY

• EBITDA: Rs 38 cr; +19% YoY

• EBITDA Margin: 10.5% vs 11.5% YoY

• PAT: Rs 23 cr; +80% YoY

FYI - Brokerage Motilal Oswal has hiked its target price on the stock to Rs 840 p/sh; implying a +14% upside from Wednesday’s close. 🔥

Charts

Chartbusters

Sometimes all it takes is one quarter’s results to make or break a company. Here are three stocks that had a sharp Q4 reaction:

1) Chennai Petroleum Corporation: The stock JUMPED +16% intraday, ending up the top NSE 500 gainer, after it announced a whopping final dividend of Rs 55 p/sh for FY24. FYI - this is 2x what it paid last year and will end up being ~30% of its full FY24 profit. And oh, it also had a great Q4 bottomline. 💰

2) MCX: The company dropped the most in over two months after its Q4 profit missed Street estimates. To top things off, its topline also fell -5% YoY. The average analyst target price sees a potential downside of -3%. 👀 

3) Tata Elxsi: The stock cracked -5% after a weak Q4 performance led by a slump in key media & telecom verticals. Not only did profit miss Street estimates, but everything else dropped QoQ. Not even a solid Rs 70 p/sh dividend could perk up the market’s mood. 😓

Check out their charts below:

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