Bharti Dials Sundar

Earnings Roundup 

Coforge rallied +8% on strong results. Broad-based growth across all key verticals boosted topline growth. Hiring freshers and overall cost control measures boosted profitability. The company’s order book rose 40% YoY to $700 million. 💸 Here are its key stats: 

• Revenue: $222 million; +4% QoQ (vs Est: $210 million)
• PAT: Rs 184 cr; +25% QoQ  (vs Est: Rs 176 cr)
• EBIT: Rs 245 cr; +15% QoQ (vs Est: Rs 246 cr) 
• EBIT Margin: 14.8% vs Est: 14.9%

Encouraged by the Q3 performance, Coforge raised its FY22 to 24% vs 22% earlier. They also announced an interim dividend of Rs 13 p/sh. The stock is up 95% in the past year. 🔥

Dr. Reddy’s slipped ~4% from the day’s high on poor results. North America, the largest market for the company, saw only 7% YoY growth despite new launches. Weak pricing power impacted operating margins. 👎 Check out its report card: 

• Revenue: Rs 5,338 cr; +8% YoY (vs Est: Rs 5,456 cr)
• Net Profit: Rs 709 cr; (vs Est: Rs 743 cr) 
• EBITDA: Rs 1,216 cr; +1.3x YoY (vs Rs 1,220 cr)
• EBITDA Margin: 22.8% vs Est: 22.4%

Dr. Reddy’s is down over 13% this month. The company will hold its analyst call later today. We will watch out for further clarity on the business outlook and growth plans. Stay tuned for more. ✔️

Overheard on Stocktwits 

IT stocks are down big from their 2021 highs. $WIPRO.NSE is near key support levels. Will it hold out and reverse the trend or extend losses? Follow Prashant Bhansali to see if the trade worked. Here’s the link: https://bit.ly/3zL3xJ9

Hello, Sundar Speaking

Bharti Airtel received one of its biggest cheques ever from none other than Google itself. The silicon valley giant will invest upto $1 billion as Airtel gets ready to take on Ambani’s Jio. ⚔️

As part of the deal, Google will invest $700 million (Rs 5,250 cr) upfront for a 1.28% stake in the company. The remaining $300 million (Rs 2,250 cr), will go towards commercial agreements. 💰

What’s Airtel doing with the money? It will mainly use these funds for carrier partnerships and offer attractive discounts and bundles to improve affordability. Their target: India’s massive 300 million feature phone users. 📱

Gopal Vittal, CEO at Bharti Airtel said on its investor call:

Our strategy is to drive smartphone adoption…we are not keen on the subsidy game, but we want to be competitive in the market. We have developed software to target devices with incentives to minimize the cost. 

Why is it doing so? The sub-$100 smartphone market accounts for ~12% of the total Indian smartphone market. But, it is also the hardest to navigate. Several manufacturers have tried and failed. So far, Jio seems to have the early advantage after launching JioPhone Next. 🥇

Bharti Airtel has never shown interest in selling its own phone. Instead, it has taken the route of exclusive tie-ups with smartphone manufacturers, subsidized tariff plans, and bundled offers. Several players have tried and tested this model in the past with limited success. But, drastic change in industry dynamics (from nearly a dozen players to three) and the digitization wave may help Bharti. Let’s see how this goes. 🤞

Movers and Shakers 

Here’s a look at this week’s top Nifty 500 movers. Sharda Cropchem took the pole position after rallying ~60%. 🔥 Gujarat Ambuja Export surged ~13% on strong earnings. Lux Industries tanked 24% after SEBI banned the company’s director for insider trading. IndiaMart InterMesh (-21%) hit a 14-month low on weak Q3 results. 🔻 Check out their charts below:

Earnings Highlights 

• LIC Housing Finance: Net Interest Income: Rs 1,455 cr; (+14% YoY) | Net Profit: Rs 767 cr; (+6% YoY) 
• Fino Payment Bank: Revenue: Rs 275 cr; (+20% YoY) | Net Profit: Rs 14 cr; (+1.2X YoY)
• Vedanta: Revenue: Rs 34,097; (+50% YoY) | Net Profit: Rs 5,354 cr; (+27% YoY)
• Deepak Fertilisers: Revenue: Rs 1,956 cr; (+35% YoY) | Net Profit: Rs 180 cr; (+1.1X YoY)
• Dixon Technologies: Revenue: Rs 3,073 cr; (+41% YoY) | Net Profit: Rs 46 cr; (-25% YoY)

Calendar

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