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Tale of the Tape 

Happy Friday guys. You’ve earned this one! 😇

Nifty and Sensex snapped their four-week gaining streak. Mixed earnings, weak global cues, and constant FII selling dragged markets lower. Midcaps and Smallcaps bled, down over 2% each. The market breadth was extremely weak with four stocks declining for every one gainer. 🚨 

Except for FMCG (+0.5%), all the other sectors closed down. PSU Banks (-2.9%) fell the most. Real Estate (-2.2%) and Metal (-1.7%) stocks also saw sharp cuts. 📉

HUL soared 3% after posting decent earnings. Havells (-5%) posted its worst single-day fall in three months on poor results. Read more below. 📊

IT stocks are down big since the turn of the year. What’s hurting the sector and what do experts have to say? Find out below. 🤓

Data Patterns slipped 3% after the 30-day lock-in period for anchor investors expired today. 🔻

Indotech Transformers rallied +9% after renowned investor Dolly Khanna bought a 1.2% stake in the company. 🤑

AGS Transact IPO got oversubscribed +7x on the final day. Adani Wilmar’s Rs 3,600 cr IPO will open on Jan 27. Stay tuned for our detailed coverage. 👍

Cryptos went belly up after trading sideways for days. Bitcoin (-7%) slipped below $39,000-mark. Ethereum crashed over 8%. 🤕

Here are the closing prints:

Nifty 17,617 -0.8%
Sensex 59,037 -0.7%
Bank Nifty 37,574 -0.7%

Earnings Roundup 

Hindustan Unilever (+3%) posted a decent set of results. Strong growth in the Home Care segment boosted the topline. Margins were steady as HUL increased prices to offset rising raw material costs. 💰

But, the ever-rising prices have started hurting consumers’ purchasing power. Volumes grew only 2% YoY led by a slowdown in rural demand. Also, when prices go up buyers tend to migrate to cheaper or smaller quantity alternatives which may dent earnings. Naturally, this is concerning and HUL has requested the Government to look into this. That’s valuable feedback ahead of the budget. Here’s its report card, for those wanting the deets: 📊

  • Revenue: Rs 13,092 cr; +10% YoY (vs Est: Rs 13,052 cr)
  • EBITDA: Rs 3,279 cr; +15% YoY (vs Est: Rs 3,241 cr)
  • EBITDA Margin: 25% (vs Est: 24.8%)
  • PAT: Rs 2,292 cr; +18% YoY (vs Est: Rs 2,226 cr)

Satisfactory results plus appealing valuations after its sharp correction overshadowed growth concerns as the stock closed +3%. Perhaps, it’s the market’s way of telling us – It’s always darkest before the dawn. 😇

The stock has barely moved in the past year. 

Havells cracked over 5% after weak Q3 performance. Topline met estimates but higher costs hurt the bottomline. Concerns over losses in its subsidiary Lloyds and its steep valuations dented sentiment. 👎 Here are the key stats: 

  • Revenue: Rs 3,664 cr; +16% YoY (vs Est: Rs 3,600 cr)
  • EBITDA: Rs 440 cr; -13% YoY (vs Est: Rs 497 cr)
  • EBITDA Margin: 12% (vs Est: 14%) 
  • PAT: Rs 306 cr; -12% YoY (vs Est: Rs 342 cr) 

Havells is +10% in the past year.

Overheard On Stocktwits

Power stocks have outperformed the market in recent weeks. Hopes of extra love from the Government in the upcoming budget plus rising power demand is driving the optimism. Anosh Mody’s top pick from the sector, $POWERGRID.NSE hit a new all-time high today. Get the latest market updates, awesome trading ideas, and more only on Stocktwits. Join now:

Trouble In Tech?

IT stocks have seen a complete turnaround in their fortunes since the start of the new year. The Nifty IT Index is the worst-performing sector, down over 7% in Jan. So what’s changed? 🤔

Most tech companies have reported decent results in the seasonally weak third quarter. Strong broad-based demand boosted topline growth. But, rising salaries and employee turnover put pressure on the bottomline. Also, most IT stocks had run up after Accenture’s blockbuster results last month. We discussed this in our newsletter here: 💯

Globally too, highly valued tech stocks are seeing selling pressure. The tech-focused Nasdaq 100 Index has slipped over 10% from its November highs. The sharp correction in the US $ from its 18-month high is another negative. PS – IT companies earn ~80% of their revenue in USD. A weak dollar, therefore, means they earn slightly lower. 📉

What next bro? Experts downplayed the recent correction as normal. They remain bullish on the sector’s long-term growth prospects and advise investors to buy IT shares on dips. ✅

Movers and Shakers

Here’s a look at this week’s top Nifty 500 movers. SIS Ltd. took the pole position after rallying ~18%. 🥇 Angel One surged ~15% on strong Q3 results. On the other hand, Sterlite Technologies (-24%) posted its worst-ever weekly fall after disastrous Q3 performance. Tata Teleservices (-23%) closed lower for a second straight week. 💔 Check out their charts below:

Earnings Highlight 

  • Polycab India: Revenue: Rs 3,372 cr; (+23% YoY) | Net Profit: Rs 316 cr; (+20% YoY)
  • PVR: Revenue: Rs 614 cr; (+12X YoY) | Net Loss: Rs 10 cr
  • HDFC Life Insurance: Net Premium Income: Rs 12,124 cr; (+28% YoY) | Net Profit: Rs 274 cr; (+3% YoY)
  • Shoppers Stop: Revenue: Rs 958 cr; (+34% YoY) | Net Profit: Rs 77 cr
  • SBI Life Insurance: Net Premium Income: Rs 18,025 cr; (+31% YoY) | Net Profit: Rs 364 cr; (+56% YoY)


Be sure to know when your stocks report earnings. Here’s the results calendar: