October 27, 2021

Wobbly Wednesday

Tale of the Tape

Good evening, everyone. Happy Hump Day! 😇

Nifty and Sensex cooled off after opening higher. Concerns over rising inflation, muted earnings, and consistent FII selling disappointed investors. Midcaps (+0.1%) and Smallcaps (+0.3%) closed barely up. 🙃

Most sectoral indices ended lower. Metals (-1.5%) and Banks (-0.9%) were the top losers. IT (+1%) stocks rose for a second straight day. 📈

Axis Bank (-7%) posted its worst single-day fall since May 2020 post weak Q2 results. Maruti Suzuki closed up 1% despite missing Street estimates. Read more below. 📊

Asian Paints will increase prices by ~9% from Nov 12. The stock closed +4% 🤑

TTK Prestige (+15%) approved a 10:1 stock split. ✌

IRB Infra was locked in a 10% lower circuit. The company will raise Rs 5,347 cr from two large investors. The issue price for the fundraising is set at a steep discount of 28% to its Tuesday’s closing price. 👎

United Breweries said beer volumes rose 50% YoY in Q2. The stock closed up 2%. 🍻

Dr. Lal Path Labs (-1.3%) will buy Suburban Diagnostics for Rs 1,125 cr. 💸

Cryptos turned around post their record-setting rally. Bitcoin fell over 6%. Ethereum (-5%) dipped below the $4,000-mark. On the other hand, Shiba Inu (+22%) hit a new all-time high. 😍

Here are the closing prints:

Nifty	18,211	-0.3%
Sensex	61,143	-0.3%
Bank Nifty	40,874	-0.9%

Earnings Roundup

Axis Bank’s (-7%) Q2 results left investors wanting more. Modest loan growth, higher operating expenses, and increased slippages hurt overall performance. 😑 Here are the key stats:

Net Interest Income: Rs 7,900 cr; +8% YoY (vs Est: Rs 8,064 cr)
PAT: Rs 3,133 cr; +86% YoY (vs Est: Rs 2,958 cr)
Gross NPA: 3.53% vs 3.85%
Net NPA: 1.08% vs 1.2%

Most banks have reported decent results this earnings season. 👍 Healthy loan growth plus lower bad loans have boosted profitability. Lenders are bullish on the growth outlook as the economy returns to normalcy. For Axis, reviving growth will be critical for the stock’s re-rating.

Axis Bank is +26% YTD. 📈

Maruti Suzuki missed Street estimates in Q2. Yet, the stock closed up 1%. Why so? To be clear, expectations were anyways low going into the results. Reduced production due to chip shortage and concerns over cost pressures were already factored in. But, a strong demand outlook and hopes of easing supply issues cheered investors. 🤗 Here’s its report card:

Revenue: Rs 20,539 cr; +10% YoY (vs Est: Rs 19,335 cr)
EBITDA: Rs 855 cr; -56% YoY (vs Est: Rs 1,091 cr)
EBITDA Margin: 4.2% (vs Est: 5.6%)
PAT: Rs 475 cr; -65% YoY (vs Est: 767 cr)

Maruti Suzuki is -5% YTD. 🚗

Overheard on Stocktwits

Here’s an interesting fundamental take on Tata Motors by Saket Mehrotra on Stocktwits. Add $TATAMOTORS.NSE to your watchlist and track the latest from our community. Check out our YouTube video to learn more – https://youtu.be/qOVL2_5iXd4?t=1342

Can’t Get Enough

Paytm has bumped up its mega public offer citing strong investor interest. The fintech giant will now raise a whopping Rs 18,300 cr from the markets vs Rs 16,600 cr as originally planned. 🤑

The company will issue Rs 8,300 cr of shares to new investors. The balance Rs 10,000 cr will be sold by existing investors – mainly China’s Ant Group, which is backed by Alibaba. Paytm’s decision to increase its IPO size comes at an interesting time. Last week, reports suggested that Paytm had canceled a Rs 2,000 cr pre-IPO round. Reason: unfavorable valuation. Hmm 🤔

Paytm has amassed over 350 million users, of which 150 million transact monthly. Over the years, it has expanded into a wide range of financial services such as equities, insurance, digital gold, and others. 💹 The company aims to use the IPO money toward scaling its ecosystem of products and pursue acquisitions. The biggest IPO in the history of Indian markets will open on Nov 8. Can’t wait anymore!

If you are interested to learn Positional Trading, you must watch the latest episode of Stocktwits & Friends with Kush Ghodasara, CMT. Kush shares his views around the current market, sectors to watch out for, and, of course, how you can become a positional trader. Watch here – https://youtu.be/G5O9GJLBZ8s

Shiba Inu To Mars?

Shiba Inu is all over the place. The meme coin soared +40% to hit a new all-time high on news of it partnering with aerospace firm, Nexus Aurora. Speculation over the role of Shiba Inu in the development of space tech and interplanetary currency drove prices higher. 💯

Additionally, a petition to list Shiba Inu on Robinhood gained over 330,000 signatures. ✅ Robinhood reported earnings yesterday and its CEO, Vlad Tenev, mentioned the following bullish commentary on the earnings call:

We are carefully evaluating whether we can add new coins in a way that’s safe for customers and in line with regulatory requirements.

Shiba Inu’s massive rally has seen its market cap surpass the $23 billion mark. That means the meme coin is now worth more than the likes of Adani Enterprises, Tata Steel, and Tech Mahindra. 🤯