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Author

Yash Upadhyaya
March 07, 2024

Tale of the Tape 

Hola amigos!

Nifty and Sensex ended flat after hitting new highs in an otherwise boring range-bound session. Midcaps (+0.2%) did a little better, while Smallcaps (+0.8%) had a strong day. The advance-decline ratio was in favour of the bulls (3:2).

It was an even mix of red and green across sectors. Metals (+1.4%) and FMCG (+1%) saw strong buying. Meanwhile, Oil & Gas (-1.2%) and Auto (-0.3%) witnessed some selling pressure.

It may be time to take a contrarian bet on FMCG stocks. More details below from DSP Netra.

Will Religare Enterprises bounce back and see a solid 2024? Read our top story below.

Mahindra & Mahindra (-4%) was the top Nifty loser after 1.1 cr shares, or a 0.9% stake, changed hands in a block deal; reports say promoters may be the likely seller.

Tata Group stocks were on fire today after rumours of a Tata Sons IPO. Rallis India (+13%), Tata Chemicals (+11%) hit new all-time highs. Tata Teleservices and Tata Power also saw healthy gains; +8% each. 

Bharat Electronics (+2%) was in focus after brokerage UBS said it sees a +19% upside from current levels.

Order wins. Hindustan Aeronautics was up 3% after an aircraft contract’s value was revised up to Rs 5,078 cr. Jupiter Wagons (+2%) gained after bagging a Rs 956 cr order from the Railway Ministry.

NLC India (-3%) fell after the GOI said it plans to sell an up to 7% stake in the firm.

Mukka Proteins had a bumper market debut, closing at R 42 p/sh; +63% over its issue price.

Here are the closing prints: 

Nifty

22,494

+0.1% 

Sensex

74,119

+0.1%

Bank Nifty

47,836

-0.3%

Stocktwits Alert 🚨🚨🚨

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Market
Load Up On FMCG Stocks? Ft. DSP Netra

Is it time to make a contrarian bet on FMCG stocks? It might sound a little nuts because, yes, the Nifty FMCG index is down -0.5% over the last 3 months. Rural sales are still gloomy and local rivals are hurting bigger listed firms. Lastly, food inflation hit 9.5% in Dec 202. Yikes! Having said that, this may just be the best time to get in, according to DSP Netra’s latest report. 💯

Historically, the FMCG sector has mirrored the performance of India’s agricultural commodities. Put simply: when agri & and other commodity prices rise, FMCG does badly. And when prices fall, FMCG does well! There’s twenty years of data to back this up. It’s not rocket science, and there are other factors at play too. But post-Covid, it’s safe to say the FMCG sector has been hurt by a volume drop caused by higher agri inflation. 📊

What’s popping? Well, the S&P GS Agriculture index hit its LOWEST level in the last 2 years recently. But FMCG volumes haven’t started rising just yet, which indicates a potential opportunity. FYI - the Nifty FMCG index is also now trading at levels seen back in 2019, 2015 and 2012 (just before a break-out). 📈

Nobody can predict the future, but when the market is overheated, it’s good to take a look at what's undervalued. 🥇

As DSP Netra notes: “This could be an opportune time to go overweight on this sector, especially from a defensive allocation standpoint. The divergence in agri commodity index and relative performance of the FMCG sector over the broader market indicates an opportunity in this sector.” 😎

​​For more details, check out the full report here: https://dspim.co/NetSWMar 

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

Specials

4 Stocks To Buy In March - By SEBI RAs

Markets are at their all-time highs but is it a good time to invest now? In this video, we cover 4 investment ideas by SEBI RAs which can deliver healthy returns even from current levels.

Stock

Hidden Gem 

Is Religare Enterprises set for a rerating? The stock has more than DOUBLED between 2022 and 2023. But in the last six months, it’s down -1%, underperforming the Nifty Smallcap 100 Index. 👎

For the unaware, Religare is an investment & financial services holding firm for a bunch of different business verticals. These include lending, health insurance and retail broking. There are a bunch of positive triggers for each business. ✅

For starters, SBI recently revoked the ‘fraud’ status that had been slapped on Religare Finvest (RFL), an NBFC that focuses on small businesses. ICYMI - RFL went through some dark times. It bled money and was placed under the RBI’s corrective action plan (CAP). But now, it will be exiting the CAP shortly and starting fresh business from FY25! 🚀

With Religare Finvest set for growth, its housing development subsidiary can also start a path to recovery. FYI - RFL is expected to issue a fresh Rs 100 cr credit line to the housing biz. This can be leveraged to a Rs 500 cr loan book and hopefully start generating fresh capital on its own. 🔥

Secondly, Religare is looking to boost its broking biz by setting up a new digital platform + making key acquisitions to boost its client base. 💰

Finally, the core cash cow, the health insurance biz, has been KILLING it. It’s generating strong cash flows led by a surge in policies. It is also looking to push the cross-selling of personal accident & travel health insurance which should boost the biz minus any extra expenses. 💪

Big Picture: Each piece of the Religare family looks set for good growth. But nothing on Religare is complete without mentioning the massive ownership overhang. ICYMI - the Burman family has been trying to take over the company and is in a face-off with current chairperson Rashmi Saluja. We won’t get into that tussle, but it needs to be resolved if things are going to get better.

FYI - brokerage Ventura has a new 2-year target price of Rs 532 p/sh; a MASSIVE +139% potential upside from current levels. 🤑

Charts

Movers and Shakers  

Here’s a look at this week’s top NSE500 movers. Tata Chemicals took the pole position after rallying +35% 🥇Tata Investment (+22%) was locked in a 5% upper circuit for all four days of the week. IIFL Finance crashed -32% after the RBI banned the company from issuing fresh gold loans. Rainbow Children's Medicare slipped -13% amidst a broader rout in hospital stocks. 📉 Check out their charts below:

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