Tale of the Tape
Good evening boys and girls. The Russia-Ukraine crisis came back to haunt the markets. 👻
Nifty and Sensex ended lower amid reports that the United States and Europe may impose fresh sanctions on Russia for alleged war crimes. However, midcaps and Smallcaps ignored these concerns, gaining ~1% each. The advance-decline ratio stood at 2:1. ✌️
Most sectors ended higher but the gains were muted. FMCG and Auto stocks were the top gainers; up +1%. Banks (-1.5%) cooled off after yesterday’s mammoth rally. 💸
Q4 earnings update. Bajaj Finance (-1%) and AU Small Finance Bank’s (+0.5%) solid business update lit up hopes of strong earnings growth. More details are below. 📊
Zomato dipped over 5% intraday on reports of the Competition Commission of India (CCI) investigation. Read more below. 🕵️♂️
SBI Cards tanked 4% after private equity giant Carlyle Group sold its entire 3% stake. 💰
Tata Power (+9%) hit a new all-time high. The company commissioned a new 160 MW solar project in Rajasthan. ⚡
ITC (+2%) extended its unbeaten streak to day 4. The stock is +18% this year. 🚀
Cryptos climbed higher. Bitcoin and Ethereum rose ~2%. Doge spiked +5% after Elon Musk picked up a stake in Twitter. ❤️
Here are the closing prints:
| Nifty | 17,957 | -0.5% |
| Sensex | 60,176 | -0.7% |
| Bank Nifty | 38,067 | -1.5% |
Earnings Sneak Peak
It’s that time of the year again. Earnings season is just around the corner and companies are giving previews of what to expect. 📊
Bajaj Finance (-1%) reported healthy growth despite Omicron-led hiccups in Q4. The company gave out fresh loans to 63 lakh customers, up 15% YoY. Except for vehicle financing, all the other segments witnessed robust growth. The company’s Assets Under Management (AUM) jumped 29% YoY to nearly Rs 2 lakh cr (vs Est: 25%-27% growth). Bajaj Finance added 22 lakh new customers in Q4. The pace of user acquisition remained steady even as regional lockdowns impacted business. Bajaj Finance witnessed profit booking after gaining for the past six consecutive days. 👍
AU Small Finance Bank’s (+0.5%) Q4 update blew past expectations. The private lender said that its loan book grew 32% over the previous year to Rs 46,800 cr. Deposit growth was a healthy +45% YoY while the CASA ratio improved slightly to 37%. FYI – a high CASA ratio means that a large portion of the deposits in the bank belongs to the current and savings deposit. Banks tend to pay low interest on these deposits (3%-4%). This results in better margins and overall efficiency. 💸
Investors were delighted by the company’s strong growth metrics. The stock closed up for a fourth straight day. Further details on bad loans are still awaited. 📈
More Trouble
Zomato and Swiggy landed in a soup. Pun intended. 🤭
The Competition Commission of India (CCI) ordered an investigation into the operations and business models of the online food delivery platforms. Zomato slipped over 5% intraday before closing down 3%. 🤕
Here’s a quick recap: In July 2021, the National Restaurant Association of India (NRAI) filed a complaint with CCI. They alleged that the two startups favored select restaurants/chains and charged steep commissions which hurt smaller players. Concerns over conflict of interest by listing own cloud kitchen brand, delayed payment cycle, and more were part of the complaint. 🙅♀️
Zomato has been in the news for all the wrong reasons. Concerns over recent investments (Blinkit), lack of communication from top management, and confusing decisions like entering the BNPL segment have compounded investor angst. The stock is down over 50% from its all-time highs. 📉
Winner Winner Chicken Dinner
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