Mood Changer

Tale of the Tape

Good evening y’all. Markets were down today. 📉

Nifty and Sensex reversed early gains to close near the lows. Midcaps and Smallcaps dropped ~1% each. Two stocks declined for every one gainer. 👎

Global news impacted markets today. Oil hit $83 per barrel, the highest since 2014. OPEC, a group of oil-producing countries, could not agree to increase oil production. This leads to higher oil prices, which is bad news for the Indian consumer. 😥

All sectors ended lower. Metals (-3%) dropped the most. Pharma (-1.9%), PSU Banks (-1.9%) and Real Estate (-1.6%) stocks also saw steep cuts. 🔻

Moody’s upgraded India’s rating outlook to “stable” from “negative”. What does this mean and why should you care? Read below. ✅

Earnings roundup. Marico (+1%) hit an all-time high on healthy business growth. Bajaj Finance (0.1%) booked 2x more loans than last year. More details below. 📊

Hindustan Copper soared +4%. Vedanta is reportedly in talks to acquire the Government’s stake in the company. 💸

Tata Motors tripped -3%. UK Jaguar Land Rover sales dropped 53% YoY in September. 🚘

Textile stocks were in focus. The Government may approve 7 new mega textile parks, as per media reports. Trident (+5%), Ambika Cotton Mills (+5%), and Vardhman Textiles (+2.4%) saw healthy gains. 🤑

Zee Entertainment (-2%) has approached the National Company Law Appellate Tribunal (NCLAT) in its dispute with Invesco. The NCLAT will hear the company’s petition tomorrow. ⚖

The Government will allow 100% Foreign Direct Investment (FDI) via the automatic route for the telecom sector. Watch out for Vodafone Idea (-1%) in the coming days. 😉

Cryptos mostly traded lower. Bitcoin held up 1%. Ethereum was down 3%. Cardano, Ripple, and Solana fell between 3%-9%. Dogecoin was 4% 📈

Here are the closing prints:

Nifty	17,646	-1.0%
Sensex	59,190	-0.9%
Bank Nifty	37,522	-0.6%

Lifting up the mood

International debt rating agency Moody’s bumped up India’s credit outlook to “stable” from “negative”. ✅ Moody’s cited India’s improving financial system and sharp economic rebound as key drivers. But, at the same time, they maintained their lowest “investment grade” rating – Baa3. No fair dude! 😑

What’s the deal here? Credit ratings are a reflection of a country’s creditworthiness to its borrowers. The higher a nation’s credit score is, the lower is its borrowing cost. For example, you would charge a higher interest if the borrower is more likely to default and vice versa. Similarly, a higher rating would attract more foreign investments. ✌

Chief Economic Advisor Krishnamurthy Subramanian told Business Standard:
It (Moody’s action) is a positive development that incorporates our consistent assessment about the strong fundamentals of the Indian economy… There is ample scope for further re-calibration in Moody’s assessments with several reforms implemented in the financial sector and the prospects for the sector looking better.

Ye Dil mange more! 😀

Earnings Sneak Peak

Marico (+1%) released its Q2 update today. The FMCG giant witnessed broad-based growth. Easing lockdown restrictions and the growing number of vaccinated folks boosted demand. 📊

Marico estimates revenues to grow between 20%-22% next quarter. They remain confident of achieving Rs 500 cr in sales from their launched foods business. Operating margins, however, may take a hit due to higher input costs. 📉 The stock jumped +4% to a new all-time high before cooling off.

Bajaj Finance (+0.1%) reported healthy growth in Q2. The company’s Assets Under Management (AUM) jumped 22% YoY to Rs 1.67 lakh cr. Bajaj Finance added 24 lakh new customers in Q2. The company gave out fresh loans to 63 lakh customers, up ~2x YoY. 💰 The stock bounced +2% before closing flat on the day.

In Search Of Value

You know a large tech IPO is around the corner when social media is buzzing on tech valuations. 🔥 Valuation guru Aswath Damodaran is back and this time he has Paytm on his radar.

Damodaran believes Paytm’s post IPO valuation would offer little upside to investors. In his bull case scenario, Damodarana values Paytm at just shy of the $20 billion mark. He points out the company’s inability to turn a profit, falling Gross Market Value (GMV), and high cash burn as one of several reasons. 💣 He wrote in his blog:

In making my assessment, I fully understand that there is substantial operating and execution risk in this story, since this value presupposes that Paytm will remain a dominant player in the Indian mobile payment space, as it grows, and that Paytm’s management will pivot from growing users to growing revenues and from growing revenues to growing profits, over time, with nothing in their history to back that up.

The mega 16,600 cr IPO is slated to launch later this year. Reports indicate the fintech company is aiming for a $25 billion valuation on listing, up from $16 billion in its latest funding round.

Fun Fact: If Paytm is valued at $25 billion, it will become the ninth-most valuable financial services company in India. 🤯

Damodaran had (in)famously estimated Zomato’s value at Rs 41 per share. Will he be right this time? Only time will tell. ✌

Ssup Dawg?

Shiba Inu token is all over the news after its crazy rise. In the last two days, $SHIB.X has rallied +65% to $0.00002197 — which is less than 1 Rupee. 💸

Crypto fans lost their shit after Elon Musk tweeted a photo of his dog sitting on a Tesla. 🐕‍🦺 The tweet caused the hashtag #SHIBA to start trending on Twitter. And rest as they say is history.

This isn’t the first time that a Musk tweet has sent a crypto token soaring. Last month, Musk posted a picture of his pup Floki (a Shiba Inu), with the caption “Floki has arrived”. The tweet sent the price of Floki-themed coin Shiba Floki soaring 3300% in one day. 🤑

$SHIB.X was founded in 2020 as an Ethereum-based alternative to Dogecoin. That’s why some people call it ‘dogecoin killer.’ It has surged about 8,000%!

This ain’t the market for faint-hearted! 💓