Tale of the Tape 

Good evening everyone. Happy Friday! 😇

Nifty and Sensex ended +0.4% higher each, a small recovery after yesterday’s nasty fall. Midcaps (+0.9%) and Smallcaps (+0.7%) also saw solid gains. The advance-decline ratio was in favour of the bulls (3:2). 🎉

Most sectors ended in the green. Metals (+1.5%), Oil & Gas (+1.2%) and FMCG (+1.2%) saw the most buying. IT (-0.8%) and Real Estate (-0.4%) stocks witnessed some selling pressure. 💸

Why are FIIs selling Indian equities like there’s no tomorrow? Read our top story below on the reasons behind the hopefully temporary exit. 🔍

BPCL (+4%) was the top Nifty gainer DESPITE a weak Q4. Meanwhile, Polycab (+6%) shrugged off past ghosts to post solid Q4 numbers. More details below. 📊

Brokerage updates. United Breweries was in focus after BoFA Securities downgraded the stock; it  sees a -3% downside from current levels. Meanwhile, Zomato gained +4% after Emkay Global upped its target price to Rs 230 p/sh. 🔥

Results reaction. Vijaya Diagnostic Centre (+10%) hit a record high after a strong Q4 show. Meanwhile, Cipla (-1%) slipped after its Q4 numbers missed Street estimates. 👎

Paytm hit a +5% upper circuit for the second day in a row! It denied reports claiming that lenders invoked a guarantee over customer defaults. 🚀

TBO Tek IPO was subscribed nearly 25x on Day 3 of bidding. 🤯

Here are the closing prints: 

Market
Market Kya Lagta Hai?

The Nifty has given up all of its 2024 gains after this week’s sharp correction. Reason: massive selling by foreign institutional investors (FIIs). ICYMI - they’ve sold Rs 23,000-cr in equities in just 8 trading days! Consequently, FII share in the Indian market hit an 11-year low! So what’s got them jittery and when will the tides reverse? 🤔

1) Uncertainty and elections: India’s volatility indicator hit a fresh 52-week high earlier this week! A higher VIX = greater general uncertainty in the market. Most of this is being caused by the nervousness around the BJP’s victory expectations. Low voter turnouts, anxiety over whether BJP can hit 400+ seats and even some dooming over whether they will get a simple majority have all played a role. FYI - there’s nothing of substance here; most experts predict a Modi sweep. But markets are sometimes irrational so expect this to continue till the result is announced. 👀

2) Global factors: The US 10-year bond yield is now a little under 5% which is pretty attractive for FIIs. This plays a role in FIIs moving out of emerging markets. Beyond that, it looks like Chinese markets are FINALLY bouncing back after a long period of underperformance. ICYMI - the Nifty is DOWN -3% over the last month while the Hang Seng is up +10%. It’s possible some FIIs may have pulled out for greener pastures out East. 💰

3) Heated valuations: Finally, let’s face it. India has had an AMAZING few years. This means valuations are quite high across stocks & sectors. It is fine for things to cool down a little; some experts would even call it healthy. There’s nothing that’s changed with the long-term India story and most analysts predict a return of FIIs towards the latter half of the year which should coincide with the start of the rate cut cycle. 🫰

Specials

5 Stocks To Buy In May - By SEBI RAs

Markets are near all-time highs but is it a good time to invest now? In this video, we cover 5 investment ideas by SEBI RAs which can deliver healthy returns even from current levels.

Earnings

Earnings Roundup

BPCL’s (+4%) Q4 results missed Street estimates! Volatility in crude prices took a toll on the company’s topline. FYI - gross refining margins for Q4 came in at $12.5 per barrel vs estimated $17.1 per barrel. A cut in petrol & diesel prices in March also likely hurt margins. Finally, a one-time impairment cost of Rs 1,800 cr (due to investments in its subsidiary Bharat PetroResources) ate into the company’s bottomline. ✂️

Here are its stats:

• Revenue: Rs 1.32 lakh cr; -1% YoY 

• EBITDA: Rs 7,884 cr; -25% YoY

• PAT: Rs 4,790 cr; -30% YoY

If the results were meh, why did the stock end up as the top Nifty gainer? Well, investors are excited about the bonus issue of shares (1:1 ratio) for one. But equally important is that most analysts are bullish on BPCL in the long run. They point to a QoQ EBITDA improvement, refinery hardware investments starting to pay off and high ethanol blending percentages as key positive triggers. ✅

BPCL is +65% over the last year.

Polycab’s (+6%) Q4 results beat Street estimates! The company’s core ‘wires & cables’ segment grew +20% YoY to help boost the topline. Its fast-moving electrical goods vertical also had a decent quarter (+17% YoY). FYI - it also declared a dividend of Rs 30 p/sh; which works out to a dividend payout of 300%. The only (slightly) sour note was that its operating margins dipped due to higher expenses. 📊

Here’s its report card:

• Revenue: Rs 5,592 cr; +29% YoY (vs Est: Rs 4,979 cr)

• EBITDA: Rs 762 cr; +25% YoY (vs Est: Rs 693 cr)

• EBITDA Margin: 13.6% vs 14.1%

• PAT: Rs 553 cr; +29% YoY (vs Est: Rs 480 cr)

Big Picture: What a turnaround for Polycab after all the I-T department allegations back in January 2024. It has bounced back from a massive -27% crash to hit a new all-time high. In its earnings report, the company reiterated it had STILL NOT received any written communication from the tax department regarding the raids. Perhaps Polycab will have the last laugh after all? 🙏

Polycab is +13% YTD.

Charts

Movers and Shakers

Here’s a look at this week’s top NSE 500 movers and losers! A solid dividend payout + strong Chinese trade data pushed Hindustan Zinc to the top, with the stock rallying +22%. 🥇 Vijaya Diagnostics (+19%) came in second on the back of strong Q4 numbers. On the flip side, Intellect Design Arena dropped -17% on a bad Q4 show. Jai Balaji Industries (-12%) closed down for the second week in a row. 📉 Check out their charts below:

Links That Don’t Suck

💯 5 Stocks to Buy in May 2024 | 2024 Top Picks by SEBI RAs | Stocks to Buy Right Now 

🚀 Multibagger FMCG pick by SEBI RA; click to know the stock

😢 Rahul Dravid To Exit As India's Head Coach: Jay Shah's Big Revelation

☑️ ​​India’s First General Election & More: 8 Iconic Pictures Capturing Indian History

🐐 Bayer Leverkusen go 49 matches unbeaten to set new European record and reach Europa League final

🎁 30 Mother’s Day Gift Ideas To Shower Your Mom With Love And Appreciation

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