Tale of the Tape 

Hola Amigos! 👋

Markets cooled sharply after opening to new record highs. The Nifty and Sensex closed with minor cuts. Midcaps (-0.3%) and Smallcaps (+0.3%) traded mixed. The advance-decline ratio was in favour of the bears (3:2). 📉 

Most sectors ended in the red. PSU Banks (-0.8%), FMCG (-0.6%) and Oil & Gas (-0.4%) saw some selling pressure. Metals (+1.1%) and Real Estate (+0.5%) bucked the trend. 💸

Godrej Properties has been killing it lately. Read our top story below on the factors fuelling its rally. 🚀

Is the recent rally in Exide too good to be true? More details below on the top bulls v bears arguments for the battery stock. 🔋

Infosys (+1%) was in focus after BofA upgraded the stock to a buy; the brokerage sees a further +18% upside from current levels. 👍

Block deals. Gland Pharma was down -3% after 90.8 lakh shares, or 5.5% equity changed hands; reports said former promoters were the likely sellers. Axis Bank was in focus after 3.34 crore shares or 1.1% of equity was traded; Bain Capital likely exited the stock. 🤑

Corporate action. Anand Rathi Wealth (+10%) will consider the proposal of a share buyback on April 12. Premier Explosives (+18%) may consider a stock split plan on April 19. ✂️

Sugar stocks jumped sharply in the final hour of trade on a Bloomberg report that GOI may ask sugar mills to produce more ethanol. Shree Renuka Sugar, EID Parry and Avadh Sugar rose between 3%-6% each. 🔥

Jindal Poly Films (-1%) was in focus after reports said it faced a shareholder lawsuit over alleged fund siphoning by promoters. 🚨

Here are the closing prints: 

Stock
Pullin’ In The Dough

Godrej Properties has been on a ROLL lately. The stock has more than doubled over the last year, easily beating the Nifty Realty Index. It’s also showing no signs of slowing down, having just reported a fantastic Q4 biz update. Here’s all you need to know about the company. 😎

ICYMI - India saw a MASSIVE real estate boom in 2023. Pent-up demand post-Covid and the luxury housing market exploded. After that upcycle, many experts felt 2024 would flatten out that growth. But nope, there’s still insane demand, at least in certain key markets. 📊

Take Godrej’s Q4 update. Bookings grew a whopping 135% YoY to hit Rs 9,500 cr in the March quarter. Over 5,300 homes were sold with a total area of 8 million square feet. This performance means the company will sell homes worth Rs 22,500 cr in FY24; +84% YoY. Godrej says this is the HIGHEST-EVER annual sales announced by any listed real estate developer. FYI - industry leader DLF is expected to clock ~Rs 20,000-cr sales for FY24. 💰

This growth hasn’t come for free though. Godrej’s net debt stood at Rs 6,900 cr in December 2023. Its gearing ratio (net debt/equity) is around 72%. Its interest expense of Rs 120 cr was nearly 50% of the company’s 9MFY24 net income. This uptick comes from aggressive land acquisitions (3 sites alone cost Rs 1,000 cr). This could be concerning. But the thing is, real estate firms live and die today by cash flow. 🏗️

That means the most important metric is new launches + pre-sales. As long as that does well, debt isn’t too much of a problem. Godrej needs to aim for one key project in key regions like Delhi NCR every quarter. FYI - Morgan Stanley recently upgraded Godrej Properties to overweight, while downgrading DLF. Make of that what you will! 😇

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

Power Packed Rally

Exide Industries has quietly DOUBLED over the last year as market speculation over EV batteries went through the roof. With the recent Hyundai partnership, Exide now has something solid. The big question: what kind of growth runway is the firm looking at? Here’s a quick look at the biggest bull and bear arguments. ⚔️

First up, the positives. With new players and a ramp-up in orders, the EV penetration story is once again gathering pace. This is GREAT news for Exide, which took a Rs 6,000 cr bet back in 2022 to set up a 12 GW lithium-ion cell unit. With the Hyundai deal, experts say Exide’s capacity utilization from existing facilities will also move up to 87.5% vs 70% currently. The bulls also add that working with a global OEM should also open the doors for Exide with other customers. ✅

The bears say this optimism overlooks a few key concerns. Firstly, EV batteries are quickly becoming a commoditized business. Even the biggest battery players globally operate at low-double-digit margins mainly because of HUGE cost reduction pressures. FYI - Tata is the only serious OEM making electric cars in India right now. But in the next 5 years, there will be at least 5 more big players. Margins will be sacrificed quickly, which will put pressure on component suppliers like Exide. 👎

TL;DR: Whether you’re a bull or a bear, Exide’s future comes down to whether it can win enough orders to make up for an inevitable future price squeeze. FYI - JP Morgan is the biggest bull here with a price target of Rs 480 p/sh (+24% from current levels), while Kotak sees a -30% downside from Tuesday's closing price. Yikes! 👀

Stocktwits Spotlight

Check out this amazing techno-funda analysis of IndSwift Labs by Trade Culture. Follow them for more amazing stock analysis and add $INDSWFTLAB.NSE to your watchlist to track its performance. Here’s the link:

Disclaimer: Trade Culture is not a SEBI registered advisor and you should not construe any information discussed herein to constitute investment advice. Consult your financial advisor prior to making any actual investment or trading decisions.

Links That Don’t Suck

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