March 21, 2022

Better Late Than Never

Tale of the Tape

Good evening, ladies and gentlemen. Welcome to the new trading week. 🎲

Nifty and Sensex dipped over a percent each. Muted global cues and weakness in heavyweight large caps dragged markets lower. Midcaps (-0.3%) and Smallcaps (+0.2%) traded mixed. 😐

Except for Metals (+1.5%), all sectors ended in the red. FMCG (-1.7%) and Energy (-1.5%) stocks fell the most. 📉

Maruti is all set to enter the EV markets (finally). The stock was up in early trade but fell with overall market weakness. More details below. ⚡

The Adani Group may join hands with Saudi Aramco, according to media reports. Read more below. 🤝

IT stocks were buzzing after Accenture’s stellar Q2 results. FYI – Accenture’s industry-beating growth sparked hopes of strong earnings growth for Indian IT companies. NIIT Ltd, Intellect Design Arena, and R Systems International rallied between 6%-12%. Check out their charts below. 📈

Aurobindo Pharma (+6%) may sell its injectables business to Blackstone for $4 billion, as per ET. 💉

JSPL (+2%) repaid $375 million in debt; aims to turn debt-free by FY23. 💪

Ratnamani Metals & Tubes (+4%) won new orders worth Rs 591 cr. 💸

Cryptos traded flat after solid weekend gains. Bitcoin (-0.5%) held above $41,000. Ethereum (-0.1%) barely moved. Avalanche added another +6%. Let’s see if crypto can bottom here. 😊

Here are the closing prints:

Nifty	17,117	-1.0%
Sensex	57,292	-1.0%
Bank Nifty	36,018	-1.1%

Charging Up

Here’s some good news for all you auto enthusiasts! Maruti Suzuki, India’s largest carmaker, will finally start selling electric cars. Better late than never. 😇

Its Japanese parent Suzuki Corp announced plans to invest over Rs 10,000 cr to jump-start the company’s EV vision. Maruti will also use the funds to manufacture EV batteries and set up a vehicle recycling facility in Gujarat. 🏭

This is a pretty big deal. Maruti has stayed away from the EV space for years due to concerns over affordability, and lack of charging infrastructure. R C Bhargava, Chairman, at Maruti Suzuki even questioned the actual environmental benefit from the shift to EVs vs cheaper alternatives like CNG and hybrid cars. Maruti’s hesitance along with stiff competition has seen its market share drop to 43% (vs +50% YoY). Meanwhile, its key rival Tata Motors controls 80% of the EV passenger car market in India. 🥇

Zooming Out: India is home to the fifth-largest auto market in the world. But, EV’s form only a fraction of it. India has set an ambitious target of achieving 65% electrification by 2030. This translates into a $200+ billion market opportunity, according to the CEEW Centre for Energy Finance. 💰

Maruti’s arrival on the scene and a certain global giant knocking at the door will definitely spice things up. Watch out for this space guys! 🤓

Chartbusters

IT stocks were in high demand after bumper results by global IT giant Accenture. 📊

Accenture’s Q2 revenue and net profits blew past Street expectations. Broad-based growth across key verticals and geographies drove the outperformance. Enthused by the strong performance, Accenture raised FY22 revenue growth guidance to 24%-26% vs 19%-22% earlier. That’s huge! 🚀

Accenture’s industry-leading performance sparked hopes of strong earnings growth for Indian IT companies, said experts. R Systems (+13%) gained the most in a single day since Nov. NIIT Ltd (+8%) hit a new all-time high and Intellect Design Arena (+6%) hit an 8-month high. Check out their charts below: 📈

Speaking of things to check out, the latest edition of Stock Room Sunday is out. In this episode, Vishal explains why he is turning bullish on the Nifty. He is also bullish on two consumer stocks and Saket shares his fundamental take on them. Watch the full video here: youtu.be/rp1mU88OuzI.

Friendship Brewing?

The Adani group is exploring a tie-up with Saudi Aramco and the oil kingdom’s Public Investment Fund (PIF), according to Bloomberg. 🤝

Details are still foggy at the moment but reports indicate that Adani may pick up a stake in the oil giant. Adani is also open to multiple options including investments in renewable energy, chemical, and infrastructure. 💰

The Adani-Aramco partnership news is also interesting because of the latter’s close ties with Ambani-led Reliance Industries. ICYMI, RIL called off its deal (estimated $15 billion) with Saudi Aramco back in November last year. Wonder what Ambani Sr. thinks about this? 🤔

Aramco has been working on entering India’s huge energy-hungry market for years. Having a partner of Adani’s size and proven track record only helps. Let’s see how this goes. 👀

Overheard on Stocktwits

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