Volatile Wednesday

Tale of the Tape 

Hola Amigos! 👋

Nifty and Sensex ended flat after a last-hour trading dip. Midcaps (-1%) and Smallcaps (-0.5%) took a hit. The advance-decline ratio was in favour of the bears (4:1). 📉

Except for Banks (+2%) and IT (+0.4%), all other sectors ended in the red. Real Estate (-2.8%) and Oil & Gas (-1.7%) were the top losers. 🤕

There have been two big winners and one loser in India’s jewelry sector. Read our top story below to find out more. 🥇

DEE Development Engineers IPO opened for subscription today! Should you bid or skip? Check out our analysis below. 🔍

EID Parry, Rashtriya Chemicals and Fertilizers and Indus Towers saw big movements today. Check out their charts below to find out why. 🔥

HDFC Bank (+3%) was the top Nifty gainer today. PS - the stock is up a cool +14% over the last month. Check out the Stocktwits Sentiment Meter: 🚀

Block deal reactions. Sansera Engineering hit a record high after 62.53 lakh shares, or an 11.6% stake, changed hands in multiple block deals; two FIIs were likely sellers. Meanwhile, Gland Pharma was in focus after 1.02 cr shares (6.2% equity) changed hands; Fosun Pharma was the likely seller. 🤝

Axis Bank (+3%) gained after it said it would raise its stake in Max Life to 19.9%.

Container Corporation (-3%) fell after reports said the GOI had shelved its disinvestment plan. 🚨

Craftsman Automation was up +3% after launching a Rs 1,200 cr QIP issue. 🤑

Here are the closing prints:







Bank Nifty



All That Glitters Is Gold

India’s jewelry sector has been facing some MAJOR headwinds recently. High gold prices in FY24 resulted in demand for gold jewelry in 2023 dropping by -6% YoY. FYI - higher prices are a double whammy because they also hurt company margins. 📊

That said, there are a LOT of positives too. Organised and listed players are taking more market share away from their informal sector rivals. Retail store expansion is the name of the game.  Hyperlocal strategies like unique store formats & lightweight jewelry designs are driving big growth for smaller players. 📈

To help you play this sector best, here are Motilal Oswal’s top picks, ranked in order of top return potential: 💯

1) Senco Gold: The stock has more than DOUBLED since its IPO last year. What’s popping? Well, despite a rise in gold prices, Senco’s sales were up +13% YoY and diamond sales were up +19% YoY in FY24. This was partly helped by an expanding consumer base -- Senco added three states and 11 cities to its store network in FY24 -- and also focused on capturing the studded light-weight jewelry segment. FYI - Motilal sees a +24% potential upside over the next year. 🤑

2) Kalyan Jewellers: A leading player in South India, the stock is up a cool +19% YTD. Fun fact: a lot of its growth in the last two years has come from expanding to newer markets. It did this by ditching its company-only model and adopting a franchisee approach; adding 76 stores in FY24. Motilal Oswal has a target price of Rs 525 p/sh; +22% from current levels. 🔥

3) Titan: The King of the Indian jewelry market has been struggling. The stock is down -5% YTD. Its Q4 margins were down over 100 bps YoY, while the topline and bottomline missed all analyst estimates. There’s not too much wrong with the giant, it’s still executing well. It just needs to ride out the current headwinds and live up to its expensive valuation tag. FYI - Motilal sees a +19% upside over the next year. 💪


Turning Point For Tata Motors?

2024 is still going strong for Tata Motors. But is it a good buy at current levels? Check out our recent video covering technicals, fundamentals, brokerage rating & SEBI RAs' views on this Tata group stock.


DEE Development Engineers IPO Review

DEE Development Engineers IPO opened for subscription today! The price band is fixed at Rs 193 - 203 p/sh. The company aims to raise Rs 418 cr from the IPO. 💸

Founded in 1988, the company is a leading piping solutions provider, catering to sectors like oil, gas and chemicals. FYI - Reliance Industries and Mitsubishi Heavy Industries are amongst its marquee clients. As of December 2023, DEE’s order book stood at Rs 829 cr; over 70% of that came from its biggest vertical, the oil & gas industry. The company is also big on exports: overseas customers accounted for ~41% of revenue. Its operations are propped up by seven manufacturing facilities across India and Thailand. 🏭

FYI - the IPO’s fresh issue comes out to Rs 325 cr, with the rest Rs 93 cr will be done through the ‘Offer for Sale’ route. The money raised will be used to mostly repay debt. 👍

9MFY24 snapshot:

  • Revenue: Rs 546 cr

  • EBITDA: Rs 68 cr

  • EBITDA Margin: 12.45%

  • PAT: Rs 14 cr

Big Picture: The Indian process piping market is booming and is projected to hit Rs 38,400 cr by 2030. DEE is also quickly expanding to make the most of that opportunity, having added another Rs 15,000 MPTA. That said, the usual caveats apply here: The company is a cyclical play and heavily dependent on the fortunes of the oil & gas sector. It also depends a LOT on the GOI’s ability to keep investing in infrastructure. FWIW - the IPO is reasonably priced and current grey market data suggests it may list at a decent 24% premium! 🔥

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Here are three companies that saw BIG movements today:

1) EID Parry was the top NSE 500 gainer, leading the sugar stock rally. ICYMI - sugar stocks were juiced up last week over reports of the GOI raising MSP. But today’s trigger was NCP chief Sharad Pawar asking PM Modi to lift the ban on sugar exports and relax limits on ethanol blending. If this happens, it would be a HUGE positive for the sector.

2) RCF was up +8% intraday after reports suggested the GST council would provide an exemption for the fertilizer sector. FYI - there’s currently a 5% GST in place. Again, if this happens, it would be a big positive trigger, which is why all fertilizer stocks were up today! 🎯

3) Indus Towers fell -3% after 59.8 cr shares (or 22% equity) changed hands in multiple block deals. Vodafone Plc was a major seller, divesting an 18% stake in the firm. Yes, VI’s debt obligations to Indus were a drag and this will help clear them. Also, reports indicate that Bharti Airtel may have picked up an additional 1% stake. 🛜

Check out their charts below:

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