Tale of the Tape 

Hola Amigos. Welcome back to the Daily Rip!

Nifty and Sensex ended flat after a volatile trading session. Midcaps (-0.5%) and Smallcaps (-1.5%) saw steep cuts. The advance-decline ratio was in favour of the bears (3:2).

It was a mixed-bag kinda day for sectors. Real Estate (+2.8%), IT (+0.9%) and FMCG (+0.7%) saw healthy buying. PSU Banks (-3.7%), Oil & Gas (-1.7%) and Metals (-0.9%) got beat up the most.

Titan (-7%) was the top Nifty loser after a disappointing Q4. Meanwhile, Britannia (+7%) was the top gainer on the Nifty on hopes of a strong FY25.

Indegene’s Rs 1,842 cr IPO opened for subscription today. Check out our analysis below to help you decide whether to invest.

PSU lenders got KO-ed after the RBI proposed new project financing rules. Check out their charts below.

Paytm was locked in a -5% lower circuit after its COO abruptly resigned.

Kotak Mahindra Bank was up +5% after a DOUBLE UPGRADE by JP Morgan; the global brokerage firm sees a further +27% upside.

Results reaction. Mangalore Refinery and Petrochemicals (-8%) was the top NSE 500 loser. Godrej Properties rallied +11% after guiding for Rs 27,000 cr in bookings in FY25. 

Zen Technologies was locked in a -5% lower circuit after its management projected an EBITDA decline for FY25.

Here are the closing prints: 

Earnings
Earnings Roundup

Titan Company’s (-7%) Q4 results missed Street estimates. A rough combination of higher gold prices and intense competition restricted topline growth. ICYMI - gold prices rose +8% in Q4 due to global geopolitical tensions. To deal with this, the company gave higher discounts which hurt margins and the bottomline. Yikes. On top of this, its watches & wearables division ALSO saw pricing pressures because of an inventory build-up with its competitors. 👎

Here are its Q4 stats:

• Revenue: Rs 11,257 cr; +16% YoY (vs Est: Rs 11,300 cr)

• EBITDA: Rs 1,109 cr; +6% YoY (vs Est: Rs 1,250 cr)

• EBITDA Margin: 9.9% vs 10.8% YoY

• PAT: Rs 786 cr; +7% YoY (vs Est: Rs 830

Big Picture: In an earnings call, the management didn’t paint an optimistic picture. Top execs said the sub-Rs 1 lakh jewelry category is seeing a lot of competition. Margins are unlikely to improve for the next 12-18 months. FYI - higher gold prices are a double whammy for Titan. It hurts demand (people don’t want to buy gold or jewelry when prices are high) and it also hurts expenses (raw material costs). To its credit, Titan has performed as well as it could given the storm. But experts are questioning whether it still justifies its high valuations. 😣

Titan is +20% over the last year.

Britannia’s (+7%) Q4 results were mostly in line with Street estimates. Despite a general market downturn, it reported high single-digit growth in overall domestic volumes. Commodity inflation is still around, but it appears to be tapering off: Britannia reported slightly better-than-expected margins.

Here is its Q4 report card:

• Revenue: Rs 4,069 cr; +1% YoY (vs Est: Rs 4,085 cr)

• EBITDA: Rs 786 cr;  -2% YoY (vs Est; Rs 

• EBITDA Margin: 19.4% vs 19.9% YoY (vs Est: 19.2%)

• PAT: Rs 537 cr; -4% YoY (vs Est: Rs 541

Big Picture: The results are meh, but there’s a lot to be excited about. Firstly, Britannia has hiked prices AND regained market share from local rivals. Both experts and the management also believe the rural demand is set to rebound in FY25 due to strong projected monsoons in the later half of this year. ICYMI - Dabur (a strong rural player) reported good numbers last week too, providing more evidence for a possible growth revival.

Specials

5 Stocks Under Rs 500 - By SEBI RAs

Who doesn't love dividend income? In our recent video, we cover 3 stocks with high dividend yields. Additionally, we also share targets on these stocks as provided by SEBI RAs.

IPO

Indegene IPO Review

Indegene IPO opened for subscription today! The price band is fixed at Rs 425-430 p/sh. The company aims to raise Rs 1,842 cr from the IPO. 💸

Founded in 1998, Indegene is a leading software solutions provider to the biopharmaceuticals & life sciences industry. Its products help each part of the business cycle: drug development, clinical trials, regulatory compliance, and sales & marketing. FYI - it currently caters to 65 key clients across North America, Europe and Asia. It also has relationships with the world’s 20 biggest biopharma firms. Fundamentally, the company is KILLING it! Its topline grew at a scorching 55% CAGR between FY21-FY23. 📊

FYI - the IPO’s fresh issue of shares only comes out to Rs 760 cr, which is a bit of a bummer. The rest will be done through the ‘Offer for Sale’ route. The fresh money raised will be used mostly to repay debt, with a small portion to be used for capex expansion. 🏭

FY23 snapshot:

• Revenue: Rs 2,306 cr; +38% YoY

• EBITDA: Rs 396 cr; +38% YoY

• EBITDA Margin: 17.2% vs 17.2% YoY

• PAT: Rs 266 cr; +27% YoY

Big Picture: Indegene hits many right notes. It's in a growing industry; global life sciences spending is expected to hit Rs 15.5 lakh cr by 2026, driven by aging population + prevalence of chronic diseases. On the flipside, its margins have come down over the years. Its client concentration also is a key risk, despite high stickiness. FWIW - the IPO is reasonably priced and most experts are bullish in the long-term. Current grey market data suggests it may list at a whopping 54% premium! 🤑

Charts

Chartbusters

PSU lenders CRASHED after the RBI proposed stricter rules for project financing. FYI - infra & power-focused NBFCs like IREDA, REC and PFC were among the worst hit, falling up to -12% intraday. 📉

So what’s the deal? Well, the regulator has floated two things. The first is tightening lending criteria; individual lenders in a consortium need a MINIMUM of 10% exposure. The second, and more important, is allocating up to 5% of the project loan as provisioning vs just 0.4% currently. 🙈

IIFL says for banks, the rules will increase provisioning requirements by up to 3% of their net worth. For NBFCs, it could impact their Tier-1 ratio by 200-300 bps and hurt their valuation multiples. For investors wanting to buy the dip, CLSA says there should be no profit blow for stocks like PFC or REC. In fact, it could prevent competition from smaller lenders! 🚨

Check out their charts below:

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