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Tale of the Tape

Hello, everyone. The market of stocks got smoked!!! 💣 

Nifty and Sensex fell the most in nearly 3 months. Fears of a global recession, worsening Russia-Ukraine tensions, and consistent FII selling hurt sentiment. Midcaps and Smallcaps got crushed, down 3% each. 🚨

It was a sea of red across the board. IT stocks (-6%) fell the most since the start of the pandemic. Metals (-4%) and State-owned Banks (-3%) also witnessed deep cuts. ✂️

ITC (+3%) was the lone gainer on Nifty after blockbuster Q4 results. Read more below. 🚀 

Diagnostic stocks are getting hammered. Dr. Lal Pathlabs, Metropolis Healthcare, and Thyrocare Technologies are down 50% from their all-time high. Know why below. 🤒

JSW Group will buy Mytrah Energy for $2 billion, according to media reports. ⚡

Ratnamani Metals (+1%)  approved a 1:2 bonus issue. ✌️ 

Power Grid (-2%) won an order to set up a transmission system in Uttar Pradesh. 🔌

Paradeep Phosphates IPO was oversubscribed 2x on the final day. On the other hand, Ethos Ltd IPO subscribed just ~0.5x on day 2. 💸

Cryptos extended losses. Bitcoin slipped 2%. Ethereum tumbled over 4%. Ripple, Cardano, and Solana were down between 5%-7% each. 📉

Here are the closing prints:

Nifty 15,809 -2.7%
Sensex 52,792 -2.6%
Bank Nifty 33,315 -2.5%

Earnings Roundup 

ITC (+3%) legit killed it in Q4. The company beat Street estimates on all counts. Cigarette volumes grew 9% over the previous year vs the expectation of 4%-5% growth. Other businesses like FMCG, agri, and paper also reported record growth. However, Omicron-led hiccups impacted the hotel business. ITC announced a final dividend of Rs 6.5 p/sh 💰. Here are its key stats: 

  • Revenue: Rs 15,531 cr; +17% YoY (vs Est: Rs 15,100 cr)
  • EBITDA: Rs 5,225 cr; +17% YoY (vs Est: Rs 5,150 cr) 
  • EBITDA Margin: 33.7% (vs Est: 34.1%) 
  • PAT: Rs 4,191 cr; +12% YoY (vs Est: Rs 4,150 cr)

Robust cigarette volumes, pickup in FMCG business, and higher exports impressed Dalal Street. At just 17x price-to-earnings, valuations remain reasonable despite the recent runup, said experts. 👍

ITC is +26% YTD.


Not in the Pink of Health

Healthcare and diagnostic companies have seen a sharp correction. Dr. Lal Pathlabs, Metropolis Healthcare, and Thyrocare Technologies are down 50% from their all-time high. I know what you’re thinking: What the heck is going on here? 🤯 

The answer is competition. Recently, Tata Group-owned Tata 1MG announced they will offer popular lab tests to customers at 1/5th of the market price. Experts fear this would trigger a pricing war leading to lower industry-wide profitability. Where have we heard this before? *cough Jio *cough*. 👀

If that wasn’t bad enough wait for this. Asia’s richest man, Gautam Adani, fresh from his latest $10.5 billion acquisition, has a new target – healthcare services. The Adani Group formed a new subsidiary Adani Health Ventures to set up diagnostic facilities and research centers across India. 🧪

Lastly, business hasn’t been that kind. Surging healthcare spending and demand for Covid tests sent profits skyrocketing in the past two years. But, as the pandemic gradually fades away profits have started to tumble, making it extremely difficult to justify their steep valuations. 🚫


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Earnings Highlights 

  • Pidilite Industries: Revenue: Rs 2,507 cr; (+12% YoY) | Net Profit: Rs 254 cr; (-17% YoY)
  • Manappuram Finance: Net Interest Income: Rs 987 cr; (-10% YoY) | Net Profit: Rs 261 cr; (-44% YoY)
  • Lupin: Revenue: Rs 3,865 cr; (3% YoY) | Net Loss: 512 cr;
  • Dr. Reddy’s Laboratories: Revenue: Rs 5,437 cr; (+15% YoY) | Net Profit: Rs 88 cr; (-76% YoY)
  • V-Guard Industries: Revenue: Rs 1,059 cr; (+23% YoY) | Net Profit: Rs 90 cr; (+32% YoY)

Calendar 

A ton of companies will post their Q4 results tomorrow… Here are all the important earnings you don’t want to miss: