Tale of the Tape 

Howdy folks! Welcome back to the Daily Rip. 👋

Nifty and Sensex ended flat after giving up their gains in the last hour. Midcaps (+0.8%) hit a new all-time high, with Smallcaps (+0.6%) having a good day too. The advance-decline ratio was in favour of the bulls (3:2). 📈

It was a mixed-bag kinda day for sectors. Oil & Gas (+1.3%) and Real Estate (+1.1%) saw a lot of buying. Pharma (-0.4%) and FMCG (-0.3%) witnessed minor cuts. 💸

Can Tata Motors bounce back after guiding for a gloomy FY25? Read the top takeaways from its analyst interaction below. 🔥

Ixigo’s Rs 740 cr IPO opened for subscription yesterday. Look at our analysis below to help you decide whether to invest. 🔍

Railtel, PNC Infratech and Honasa Consumer all saw big movements today. Check out their charts below to find out why. 🚀

ONGC (+6%) was the top Nifty gainer after Jefferies said it sees a +50% upside from current levels. 🤑

Block deal reactions. IndiGo cracked -4% after 83.7 lakh shares (2.2% equity) changed hands; reports say promoter Rahul Bhatia was the likely seller. IRB Infrastructure Developers fell -5% after a Spanish investor reportedly sold 41.2 cr shares (6.8% equity) in a block deal. 🤝

Tata Chemicals was up +3% after a big US distributor raised soda ash prices. ✅

Transformers and Rectifiers (India) was locked in a +5% upper circuit after reports said it would raise Rs 500 cr via the QIP route. 💰

Dredging Corp was locked in a +10% upper circuit after winning a massive Rs 2,106 cr contract from the Syama Prasad Mookerjee Port Authority. 🚧

Here are the closing prints: 

Stock
Road To Glory

Tata Motors was up +2% intraday after its analyst day calmed some investor nerves. ICYMI - the stock got KO-ed last month when the company signaled a gloomy outlook for FY25. In its recent investor interaction, Tata also threw in a few kinda positive signs to go with all that gloom. So, here are the top takeaways: ✅

1) PV biz: Post demerger, the company aims to hit 10% EBITDA for its consolidated passenger vehicle + electric vehicle biz in the next 5 years. FYI - sales will likely be subdued in H1FY25  due to a high base and customers delaying purchases over elections & the heatwave. 🚗

2) EV biz: Despite rising competition, Tata Motors maintained its industry leadership with a +70% market share. Going forward, they are hopeful of turning EBITDA breakeven by next year, which is a big positive. ⚡

3) Debt plans: The Tata Motors India biz is debt-free as of FY24. The company as a whole aims to become debt-free by the end of the current year, which will depend mostly on the Jaguar Land Rover (JLR) vertical. FYI - while JLR’s operating margins are projected to be flat in FY25, its May sales bucked weaker projections to grow a cool +29% YoY. 📊

4) CV biz: The ugly duckling of the Tata Motors stable. Yes, the CV biz was more or less flat. But the company points to a +16% bump in average realisation over the last 6 quarters. It also hopes that by rolling out 60 new variants in FY24, it will hit a larger total addressable market. Finally, it’s seeing ‘green shoots’ in its small CV vertical and hopes the rest will follow. 💪

TL;DR: Passenger vehicle biz should see a margin bump, JLR will become net debt-free this year and FY25-26 just might be the year of electric vehicles. Is that enough to be super bullish? We’ll have to wait and find out. 😇

Specials

Election Stocks Picks By Brokerages 🚀 

Modi 3.0 begins is off to a bang with markets hitting new all-time highs. Which stocks should find a seat in your portfolio? Check out our recent video where we cover brokerage picks post-election results.

IPO

Ixigo IPO Review

Ixigo IPO opened for subscription on Monday. The price band is fixed at Rs 88-93 p/sh. The company aims to raise Rs 740 cr from the IPO. 💰

La Traveneues Technology, popularly known as ‘Ixigo’, is India’s second-biggest online travel agency with a 6.5% market share, behind industry leader MakeMyTrip. While Ixigo operates across segments, its bread-and-butter is train tickets: rail accounts for ~45% of its topline and it has a 52% market share in the vertical. Fun fact: the company swung back into profits in FY23 after an awful Covid-affected FY22. FYI - the IPO is mostly an “Offer for Sale’ (Rs 620 cr), The money that comes into the company (Rs 120 cr) will be used to upgrade tech & ‘strategic initiatives’. 👍

9MFY24 snapshot:

• Revenue: Rs 491 cr; +34% YoY

• EBITDA: Rs 34 cr; +15% YoY

• PAT: Rs 66 cr; +252% YoY

Big Picture: Ixigo has done well in an extremely crowded space. But, its biggest competitive advantage -- train tickets -- is also its biggest potential source of weakness. For the unaware: the railway booking biz in India is monopolized by IRCTC. Ixigo is just a ‘non-exclusive’ ticket service provider for IRCTC. The current agreement lasts till 2028, but if the GOI chooses to pull the plug, it could be a MAJOR negative trigger. This is why Ixigo has been trying to diversify. Bus bookings are good, but flights and hotels are insanely competitive and tough to make money in as well. We’ll have to see how this pans out. 🤨

FWIW - the IPO is reasonably priced and current grey market data suggests it may list at a decent 25% premium! PS - the issue was subscribed 1.95x on Day 1 of bidding. 🚀

Charts

Chartbusters

Here are three companies that saw BIG movements today:

1) Railtel rallied +10% intraday after it bagged a Rs 81 cr contract from the defence ministry. PS - this wasn’t the only good news. Most rail stocks jumped after the GOI re-appointed Ashwini Vaishnaw as rail minister, with Railtel leading the pack. Looks like policy continuity is on the menu! 🚅

2) PNC Infratech tanked -9% intraday after the CBI searched the company’s MD home and arrested four employees. FYI - the case itself appears relatively trivial, a Rs 10 lakh bribery investigation. So why are investors nervous? Well, companies that are convicted of bribery can be blacklisted from GOI projects, which would be a BIG negative for PNC. 🚨

3) Honasa Consumer fell after 66.2 lakh shares (2% equity) changed hands in a big block deal. FYI - the transaction happened at a 4% discount to the previous close. Reports say two foreign investors were the likely sellers. With markets at all-time highs, we’re going to be seeing more of this. But it doesn’t look like investors like it! 👀 

Check out their charts below:

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