Never Say Never

Earnings Roundup 

Axis Bank’s (+7%) Q3 results blew past Street expectations. The private lender posted the highest loan growth amongst its peers aided by a pickup in economic activity. Margins improved over the previous quarter on better product mix. Record low bad loans boosted profitability. 💰 Here are its key stats: 

• Net Interest Income: Rs 8,653 cr; +17% YoY vs Est: Rs 8,220 cr
• PAT: Rs 3,614 cr; +3x YoY vs Est: Rs 3,185 cr
• Gross NPA: 3.17% vs 3.53% (QoQ)
• Net NPA: 0.91% vs 1.08% (QoQ)

Axis Bank had been a major underperformer last year, up ~14%. Going forward, experts believe the acquisition of Citi’s retail business plus change of management will be critical for the stock’s re-rating. ✔️

Maruti Suzuki (+6%) rallied the most in over 2 months on strong results. Topline beat estimates as supply issues eased during the quarter. Price hikes and overall cost reduction aided the operational performance. 🔥 Here’s its report card: 

• Revenue: Rs 23,246 cr; -1% YoY vs Est: Rs 23,051 cr 
• EBITDA: Rs 1,559 cr; -30% YoY vs Est: Rs 1,261  cr
• EBITDA Margin: 6.7% vs Est: 5.4%
• Net Profit: Rs 1,011 cr; -50% YoY vs Est: Rs 860 cr

Maruti Suzuki currently has orders for ~2.5 lakh. Going forward, the company is bullish on the demand outlook and expects production to pick up as chip availability improves. Still, no word on its EV plans though. 🙃

Maruti is +7% in the past year.

Overheard on Stocktwits

Real Estate stocks will be in focus as we get closer to the Budget. ChartMojo is bullish on Macrotech Developers after the recent correction. Add $LODHA.NSE to your watchlist and track the latest news, expert views, and more only on Stocktwits. Here’s the link: https://bit.ly/3zL3xJ9

Adani Gets In On The Action

Adani Wilmar IPO will open on Jan 27. The price band is fixed at Rs 218-230 per share. The company plans to raise Rs 3,600 cr from the markets. 💸

Adani Wilmar, a 50:50 joint venture between the Adani group and Singapore-based Wilmar International, is a leading fast-moving consumer goods (FMCG) company. Its flagship brand, “Fortune”, is India’s highest-selling edible oil brand. They also offer a wide array of packaged foods and are one of the fastest-growing brands in the category. Adani Wilmar has +20 plants and a robust pan-India distribution network catering to 1.6 million retail outlets. The company will use the IPO money to reduce its debt and pursue acquisitions in packaged foods biz. 📈

Financial Snapshot: 

• FY21 Revenue: Rs 37,090 cr; +25% YoY
• FY21 Net Profit: Rs 728 cr; +58% YoY

Adani Wilmar is the market leader in the edible oil segment. Going forward, the company is focused on scaling up the high-margin packaged foods business. Its robust financial track record, strong brand recall, and reasonable valuations are key positives. 💯

A first Adani IPO in twelve years will definitely interest investors. But, weak market sentiment may play a spoilsport. 🙃

Zomato Loses The Crown

Swiggy overtook Zomato to become the largest food delivery company. Cheers guys!! 🍾

Swiggy’s latest $700 million fundraise values the startup at $10.7 billion, +2x from its previous round. Despite a 10% jump today, Zomato ($10.5 billion) continues to trail Swiggy. 🥈

Zomato had a flying start to life on Dalal Street amidst all the debates about its business model and valuations. At its peak in November, the company was valued at ~$17 billion. That’s more than the market capitalization of large established companies like Hero MotoCorp, Shree Cement, and BPCL. Things quickly turned south and last week’s brutal selloff nearly wiped out all the gains for IPO investors. 🥺

Founder Deepinder Goyal motivated employees to focus on execution. He wrote in a letter:

There is an important lesson here for all of us which I want to reiterate – we cannot control the market’s sentiments or the macroeconomic factors which also significantly impact our valuations… I have been waiting for a bear market for a long time now – that is when funding dries up for everyone, and companies with the most solid teams and execution rise to the top. In the long term, our stock price, amongst other things, will take care of itself. 

The message was received loud and clear by the markets. Let’s see how this goes. 👍

Earnings Highlights 

• Pidilite Industries: Revenue: Rs 2,851 cr; (+24% YoY) | Net Profit: Rs 359 cr; (-19% YoY)
• Federal Bank: Net Interest Income: Rs 1,539 cr; (+7% YoY) | Net Profit: Rs 522 cr; (+29% YoY)
• CarTrade Tech: Revenue: Rs 89 cr; (+15% YoY) | Net Loss: Rs 23 cr
• Indian Energy Exchange: Revenue: Rs 131 cr; (+36% YoY) | Net Profit: Rs 81 cr; (+39% YoY)
• Deepak Nitrite: Revenue: Rs 1,748 cr; (+41% YoY) | Net Profit: Rs 242 cr; (+12% YoY)

Calendar 

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