December 23, 2021

Three In A Row

Tale of the Tape

Good evening everyone and Happy Friday Jr. 🤗

Markets extended the rebound to day three. Strong US economic data and recovery in the Indian Rupee cheered investors. Midcaps and Smallcaps also saw decent gains, +1% each. Over two stocks advanced for every one loser. ✌️

Most sectors closed in the green. Real Estate (+2.3%) was the top gainers for a second straight day. We recently discussed key industry drivers in our newsletter. Here’s the link. FMCG and Energy stocks rose +1.3% each. 📈

Jubilant Foodworks (+3%) increased pizza prices by 5%-6%. Damn you inflation. Read more below. 🍕

Liquor stocks were in high spirits. Radico Khaitan, Som Distilleries, and GM Breweries surged between 3%-6%. Check out their charts below. 🍻

Infosys (+2%) hit a new all-time high. The stock is up 8.5% in December vs a mere 0.4% gain for the Nifty50 index. 🥇

Hero MotoCorp (+2%) will increase prices by up to Rs 2,000 from Jan 4. 🛵

Indiabulls Real Estate (-1%) will raise Rs 1,500 cr from large investors. 💰

GE Shipping will consider the proposal of a buyback on Dec 27. The stock jumped +8%. 💯

Man Industries (+4%) won new orders worth Rs 225 cr. 📊

IPO Update. Medplus Health had a solid start to life as a listed company. The stock closed at Rs 1,121 per share, +41% from its issue price. CMS Info Systems IPO sailed through on the final day. 👍

Cryptos cooled off. Bitcoin fell 2%. Ethereum slipped 3%. Doge and Shiba Inu bucked the trend, gaining 2% and 5% respectively. 🐕

Here are the closing prints:

Nifty	17,072	+0.7%
Sensex	57,315	+0.7%
Bank Nifty	35,191	+0.5%

Honey I Shrunk The Pizza

Everything is getting expensive, including your favorite pizza. Wtf inflation! 😤

Jubilant Foodworks, the operator of Domino’s Pizza in India, reportedly increased prices by 5%-6% ahead of Christmas and New Year’s. They mostly blamed the price hike on higher raw material costs. 💸

What’s happening? Consumer spending rebounded sharply post lockdown. Pent up saving from staying at home plus fewer restrictions boosted demand. But, supply wasn’t ready which in turn pushed prices higher. Companies are hiring more people to meet the increasing demand. To offset higher salaries, companies must raise product prices. This is indirectly contributing to inflation. 📈

Despite the price increase, Dominos claims its prices are the lowest amongst its peers. They’re expecting higher operating margins with a limited impact on demand. Experts remain bullish on Domino’s strong delivery model, diverse offerings, and aggressive store expansion. But, steep valuations and the Omicron threat are key risks. ⚠️

Cheers Everyone!

Liquor stocks were in high demand today. Hopes of strong holiday period demand cheered investors. The long-term industry outlook also remains positive. There are many positive catalysts here: low alcohol consumption (on a per capita basis), a young and aspiring population, and rising income levels. 🥂

Radico Khaitan, Som Distilleries, and GM Breweries surged between 3%-6%. Check out their charts below:

To clarify, we are not recommending alcohol consumption!

We just dropped the latest episode of Stocktwits & Friends. In this episode, we have Dhwani Patel, a seasoned technical trader. She talks about her journey of becoming a trader, what its like to be a female trader, and thoughts on current market conditions. Watch the episode here: https://youtu.be/3bhp72yTD84

Big Money Move

Foxconn India arm Bharat FIH has filed its IPO papers with SEBI. The company plans to raise Rs 5,000 cr from the markets. FYI, Foxconn is the world’s largest electronics contract manufacturer and is famous for assembling Apple iPhones. 📱

Bharat FIH is the largest electronic manufacturer in India, with 15% market share. It makes mobile phones, TVs, wearables and has recently expanded into EVs. Bharat FIH has facilities in Andhra Pradesh and Tamil Nadu. They also offer warehousing, logistics and after-sales services.

FWIW: Globally, companies are keen to move electronic manufacturing away from China. Factors like high trade tariffs, regulatory hurdles and supply chain diversification are key drivers. Meanwhile, our government is keen on becoming an electronics manufacturing hub. India’s electronic manufacturing services market is estimated to touch $135 billion by FY26. Watch out for this space. 🔥

Not So Meme

Floki Inu is +280x in 2021. 🤯

Meme coins like Dogecoin, Shiba Inu, and Dogelon Mars have been all the rage this year. Started as a joke, they are now expanding their use case. For instance, AMC (the famous US multiplex chain) said that it will accept Shiba Inu for online payments. Elon Musk claims Tesla will soon accept Dogecoin on its merchandise store. 👊

Speaking of Floki, it made its debut on decentralized finance (DeFI) project Inverse Finance. Over $44 million worth of Floki Inu were pumped into a liquidity pool in 24 hours. But what does it mean? 🤔

DeFi projects offer a host of services like lending, borrowing, and trading. Investors can now submit their Floki Inu tokens as security deposits and take loans. Loans will be offered in Dola, a stablecoin pegged to USD. As a result of this, it is less volatile compared to Bitcoin or Ethereum. 😇

Floki Inu had a rocky start. Its original developers went rogue after cashing in thousands of Floki Inu coins. BUT, early adopters relaunched the coin. The project has since grown and its market cap hit an all-time high of $1.2 billion. Reports claim that the people behind the scenes are working with governments to build schools in Guatemala, Nigeria, and Laos. Talk about comebacks!