Tale of the Tape 

Hola Amigos. Markets ended at record highs but intraday volatility continued to cap further upside.

Nifty & Sensex AGAIN failed to hold on to their morning gains and nosedived in the final hour of trade to end flat. Are we in a “sell on rise” market? Midcaps (+0.5%) and Smallcaps (+0.9%) had a solid day of gains. The advance-decline ratio was in favour of the bulls (3:2).

It was a mixed-bag kinda day for sectors. Energy (+1.1%) and Auto (+0.6%) were the top gainers. FMCG (-1.1%) and Pharma (-0.6%) witnessed some selling.

Colgate Palmolive India gained +5% after a strong Q1 show. Meanwhile, Varun Beverages cracked -7%. More details below.

Akums Drugs and Pharmaceuticals IPO kicked off today. Check out our analysis below to help you decide whether to subscribe.

IdeaForge, NTPC and Exide Industries all saw big movements today. Check out their charts below to find out why.

Power Grid Corporation (+2%) hit an all-time high after upping its capex guidance for FY25 to Rs 18,000 cr.

TTK Prestige (+3%) will consider approving a share buyback proposal on August 2.

New India Assurance (+2%) was up after reports said it would hike premiums on some products by 10%.

PNB Housing Finance (-2%) was in focus after 3.4 cr shares (13.1% equity) changed hands in a block deal; reports say Carlyle was the likely seller.

Order wins. ITD Cementation (+3%) bagged a Rs 1,237 cr contract to build a residential colony in New Delhi. Meanwhile, RVNL rallied +3% intraday after winning a Rs 739 project in Himachal Pradesh.

Here are the closing prints:

Spotlight
SEBI RA Spotlight

Breakout alert!!! DLF has broken out of its downward sloping trendline which is a bullish sign, according to SEBI RA Bharat Sharma. Volume activity has been on the higher side and the stock has crossed above its key short term moving averages as well indicating strong momentum. Sharma expects the stock to hit 960 in the next 2 months which is a decent 10% upside from current levels. 

About Bharat: Bharat Sharma is an equity analyst with over 10 years of experience. He holds a Postgraduate Diploma Management in Finance. Prior to joining StockAce as a partner, he was involved in several teaching initiatives about financial market analysis and financial literacy.

Earnings
Earnings Roundup

Colgate Palmolive’s (+6%) Q1 results beat Street estimates! High single-digit volume growth in its key toothpaste vertical + increased demand from rural markets helped boost the overall topline. FYI - rural demand beat urban markets for the second quarter in a row! Finally, despite higher ad expenses (+10% YoY), the company’s margins grew with the help of price hikes & strict cost control measures.

Big Picture: Despite the lack of a consumption stimulus in the Budget, FMCG firms are benefiting from a steady rural revival, helped by a good monsoon this time around! While Colgate had warned that margins could take a hit in FY25, as it focused on volume growth, that hasn’t happened just yet!

Here is its Q1 report card:

• Revenue: Rs 1,497 cr; +13% YoY (vs Est: Rs 1,4230 cr)

• EBITDA: Rs 508 cr; +22% YoY (vs Est: Rs 470 cr)

• EBITDA Margin: 34% vs 31.6% last year

• PAT: Rs 364 cr; +33% YoY (vs Est: 332 cr)

Colgate Palmolive India is +36% YTD

Varun Beverages Q2 results mostly met Street estimates. Domestic volumes were up +23% YoY on the back of strong demand, offsetting the flat growth in the Zimbabwe market. Operating margins also saw a bump, helped by better procurement strategies and a shift to lighter-weight packaging. FYI - the company also announced a 2:5 stock split. 

If the results were decent, why was the stock the top loser on the NSE 500? This was mostly due to profit-booking. ICYMI - Varun Beverages has nearly DOUBLED in the last year and hit an ATH just yesterday. It is also trading at eye-watering valuations right now, providing a decent exit point for investors.

Here are its Q2 stats. PS - the company follows a Jan-Dec financial reporting cycle:

• Revenue: Rs 7,197 cr; +29% YoY (vs Est: Rs 7,344 cr)

• EBITDA: Rs 1,991 cr; +32% YoY (vs Est: Rs 1,976 cr)

• EBITDA Margin: 27.7% vs 26.9% last year

• PAT: Rs 1,262 cr; +26% YoY (vs Est: Rs 1,276 cr)

Varun Beverages is +28% YTD.

Specials

Rakesh Jhunjhunwala Portfolio Changes

We all miss the legendary investor – Rakesh Jhunjhunwala! In this video, we cover his top holdings and latest portfolio updates along with fundamental and technical views on the same.

IPO

Akums Drugs & Pharmaceuticals IPO Review

Akums Drugs and Pharmaceuticals IPO opened for subscription today! The price band is fixed at Rs 646-679 p/sh. The company aims to raise Rs 1,857 cr from the IPO.

Founded in 2004, Akums is India’s biggest pharma ‘contract development & manufacturing organisation (CDMO). The company basically makes drugs and other ingredients for many generic pharma firms including Sun Pharma, Cipla and Dr Reddy’s. Fun fact: Akums can make nearly 50 billion finished dosages per year through its 11 manufacturing facilities, which is insane. FYI - while the business has been doing OK, its financials took a hit because of a share buyback obligation granted to a key PE investor. 

FYI - the IPO’s fresh issue is around Rs 680 cr, the rest being done through the ‘Offer for Sale’ route. The money raised will mostly be used to pay off debt.

FY24 snapshot:

• Revenue: Rs 4,178 cr; +14% YoY

• EBITDA: Rs 123 cr; -64% YoY

• EBITDA Margin: 3% vs 9% YoY

• PAT: Rs 1 cr; -99% YoY

Big Picture: While the core CDMO biz is fine, Akums recent expansion into APIs, which is still making losses, has eaten into its margins & bottomline. Key triggers to watch out for include how quick it can turn the API vertical around and its expansion into global markets.  FYI - international business accounts for only 6% of the topline right now. But, overseas clients come with juicy 21% margins vs just 15% for local Indian contracts. The IPO’s pricing is on the expensive side, but current grey market data suggests it may list at a cool 30% premium!

Charts

Chartbusters

Here are three companies that saw big movements today!

1) IdeaForge Technology crashed -11% after posting awful Q1 results. Its profit nosedived -90% YoY on the back of weak drone sales and  escalating raw material costs. FYI - its EBITDA margins dropped to just 4% in Q1 vs 29% last year. PS - the stock is down -33% in the last year.

2) NTPC hit a record high after Jefferies hiked its target price for the stock to Rs 485 p/sh vs Rs 445 p/sh earlier. ICYMI - the PSU firm also reported solid Q1 numbers with a double-digit bump in topline and bottomline. Experts say the long-term visibility for both thermal & nuclear segments look strong. 

3) Exide Industries cracked -4% after its Q1 numbers missed Street estimates! Escalating raw material costs also weighed on the firm, with its topline up just +6% YoY. FYI - the stock was also hit by profit-booking today. ICYMI - Exide has more than DOUBLED in the last year.

Check out their charts below:

Links That Don’t Suck

🚀 Top 3 Stocks in Rakesh Jhunjhunwala's Portfolio | Top Holdings of Jhunjhunwala 2024 | Titan 

💬 Stocktwits is hosting a free AMA with SEBI RA Chintan Chheda. Click to ask  

💯 Scientists Develop AI Model That Predicts Breast Cancer Years Before Visible Symptoms 

🥉 Sarabjot Singh: A Farmer's Son Who Shot India To Historic Bronze In Paris Olympics 

😡 Rewarding Hard Work With More Work At The Same Pay In The Name Of ‘Upskilling’ Is Unfair

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