Quiet Monday

Earnings Roundup 

HDFC Bank’s (-1.4%) Q3 numbers were in line with Street’s expectations. Strong loan growth, improvement in loan book quality, and lower provisioning were key positives. But, weakness in retail lending and credit card business spoilt an otherwise picture-perfect quarter. Here are the key stats: 📊

• Net Interest Income: Rs 18,443 cr; +13% YoY (vs Est: Rs 18,521 cr)
• Net profit: Rs 10,342 cr; +18% YoY (vs Est: Rs 10,179 cr)
• Gross NPA: 1.26% vs 0.8%
• Net NPA: 0.4% vs 0.1%

Although not bad, HDFC Bank’s Q3 results lacked any real punch. Going forward, improvement in retail credit and pickup in the credit card business will be key triggers for the stock. HDFC Bank is flat in the last year. 🥺

HCL Tech beat Street estimates in Q3. Yet, the stock crashed 6%. Why so? As we all know, IT and digital services demand hit the roof post-Covid. Demand for skilled workers and developers is sky-rocketing. Startups flush with VC money are also battling for the same talent driving up salaries. 📈

HCL is not alone here. Most IT companies are seeing margin pressure due to rising salaries and employee turnover. Going forward, HCL expects to clock margins of ~19% vs the last 10 quarter average of 20%. Here’s its report card, for those wanting the deets: 

• Revenue: $3 billion; +7% QoQ (vs Est: $2.9 bn)
• PAT: Rs 3,442 cr; +5% QoQ (vs Est: Rs 3,374 cr)
• Order book: $2.1 billion; +64% YoY 

Don’t worry bulls, HCL Tech is +28% in the past year. 👍

Ultratech Cement rose 3% on strong results. Topline beat estimates despite a construction ban in Delhi and extended monsoon in the South. One-time tax gain helped boost profitability. But, higher input costs hurt operating margins. 👎 Here are the key stats: 

• Revenue: Rs 12,984 cr; +6% YoY vs Est: Rs 12,625 cr
• PAT: Rs 1,710 cr; +8% YoY vs Est: Rs 1,163 cr
• EBITDA: Rs 2,419 cr; -22% YoY vs Est: Rs 2,480 cr
• EBITDA Margin: 18.6% vs Est: 19.6%

Ultratech is bullish on cement demand in the coming quarters. Government’s infrastructure push and healthy real estate demand surely helps. Also, the company will invest Rs 965 cr to double its capacity in the fast-growing white cement category. 💸

Ultratech Cement is +46% in the past year. 🔼

Overheard on ST

Tata Elxsi is +7% in the last five days. Follow Anosh Mody for more sick ideas like these. Add $TATAELXSI.NSE to your watchlist and track the latest from our community.

Electrifying Ride

Tata Motors aims to sell 50,000 electric cars next year, a whopping 5x YoY increase. This translates to Rs 5,000 cr in potential revenue just from its EV business! ⚡

What’s the plan bro? Tata Motors wants to make electric cars mainstream. But, on average they cost 25%-30% more than your regular car. To fix this, Tata Motors will launch three new cars priced under Rs 10 lakh, and will become the most affordable EV brand. Tata is also working with dealers to expand its retail footprint. Affordable electric cars combined with wider reach, Tata Motors aims to bump annual sales to 1.25 lakh units in the next two years! 🚗

Big Picture: India is the 4th largest passenger vehicle producer in the world. But, EVs constitute merely 1% of total vehicle sales. In the next five years, electric cars are estimated to make up 12% of all passenger cars. Favorable government policies and incentives, rising environmental awareness, and higher fuel costs may drive increased adoption. 📊

FYI – the latest edition of Stock Room Sunday is out. In this episode, Vishal & Saket discuss the crucial levels for the indices along with 2 new trade ideas. Saket also covers a recent IPO that he has added to his portfolio. Watch here – https://t.co/JxkylxQCZm

Its The Time To Crypto?

Torus Kling Blockchain will launch India’s first Bitcoin and Ethereum Futures ETF by this March. This would be the first crypto-backed futures ETF outside the US. 😲

Torus Kling has inked a deal with BSE’s international arm India INX for the ETF. It is targeting around $1 billion assets under management in the first two years. The ETF will be launched in a sandbox arrangement, usually reserved for new fintech products that require testing. The exchange-traded fund (ETF) is an easy and less volatile way to gain crypto exposure. ✅😃

FWIW, India reportedly has 15+ million crypto investors despite the regulatory uncertainty. Here’s hoping for some good news for all you hodlers! 🤞

Up Next

We’re in the thick of the earnings season. Here’s all the companies that will announce their results.