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Relief Rally Or What?

Tale of the Tape 

Heya guys. The weekend is here! 😄 

Markets snapped their five-week losing streak as investors went dip hunting. Nifty and Sensex rallied ~3%, most in nearly 2 months. Midcaps (+2.2%) and Smallcaps (+2.5%) also witnessed healthy gains. The market breadth was extremely positive, with over five stocks gaining for every one loser. 🤑

It was a completely opposite picture from yesterday. Not a single sector closed in the red. Real Estate and Metals zoomed over 4% each. Pharma (+3.6%) had the best day in over a year. 🚀

Ashok Leyland rallied +6% on strong Q4 results. Dr. Reddy’s soared +8% intraday despite a 76% YoY drop in profits. Read more below. 📊

Zydus Life (+4.5%) will buy back shares at Rs 650 apiece; that’s +81% more than Friday’s closing price. 💰

Welspun Corp (+17%) hit a new all-time high. They won a mega Rs 5,000 cr order to supply pipes in the United States. 🔥

Container Corp (-5%) will invest Rs 8,000 cr for capacity expansion. 🏭  

Metropolis Healthcare (+0.1%) is reportedly in talks to sell a minority stake for $300 million. 💸

Ethos Ltd IPO sailed through on day 2. eMudhra IPO opened for subscription today. More details below. 😎

Cryptos were back in the green. Bitcoin and Ethereum rallied ~5% each. Matic, XRP, and Solana rose +8%. 📈

Here are the closing prints:

Nifty 16,266 +2.9%
Sensex 54,326 +2.9%
Bank Nifty 34,276 +2.9%

Earnings Roundup 

Ashok Leyland’s (+6%) Q4 results blew past Street expectations. Volumes rose 11% YoY vs estimates of 8%-10% growth. The company’s truck market share expanded to ~31%; the highest since 2019. Operating margins expanded over the previous year despite the rising raw material costs. One-time gain of Rs 470 cr boosted profitability. 💸 Here are its key stats: 

  • Revenue: Rs 8,744 cr; +25% YoY (vs Est: Rs 8,169 cr)
  • EBITDA: Rs 776 cr; +45% YoY (vs Est: Rs 577 cr) 
  • EBITDA Margin: 8.9% (vs Est: 7%) 
  • PAT: Rs 901 cr; +4.5x YoY (vs Est: Rs 252 cr)

Going forward, the strong cyclical recovery in commercial vehicles, new launches, and volume recovery in bus segments are key growth catalysts, said experts. ✅

Ashok Leyland is +2% YTD. 

Dr. Reddy’s (+8%) Q4 results were spectacular. North America, the largest market for the company, reported a 14% YoY growth aided by new launches. Operating margins remained steady despite weak pricing power. But, muted API business and an insane one-time loss of Rs 756 cr dragged profits. 📊 Check out its report card: 

  • Revenue: Rs 5,437 cr; +15% YoY (vs Est: Rs 5,242 cr)
  • Net Profit: Rs 88 cr; -76% YoY (vs Est: Rs 677 cr) 
  • EBITDA: Rs 1,298 cr; +16% YoY (vs Rs 1,133 cr)
  • EBITDA Margin: 23.9% vs Est: 22.6%

Besides strong results, investors also cheered the bullish management outlook. Dr. Reddy’s is confident of more USFDA approvals and aims to launch three to five new products each year. They also maintained their 25% growth guidance for FY23. 💪

Dr. Reddy’s is -13% YTD.

Raining IPOs

eMudhra Ltd’s IPO kicked off today. The price band is fixed at Rs 243-256 per share. The company plans to raise nearly Rs 413 cr from the markets. 💸 

eMudhra is India’s largest certifying authority with ~38% market share. They issue digital certificates to individuals and corporates used for income tax filings, tenders and banking needs, digital security solutions, and paperless transformation. eMudhra has a large diversified client base including governments and banks across the world. They have a robust +90,000 army of channel partners in India and 539 system integrators globally. eMudhra will use the IPO money to upgrade its digital infrastructure, pay off debt, and fund working capital requirements. 💯 

Financial Snapshot: 

  • 9MFY22 Revenue: Rs 138 cr (FY21: Rs 132 cr)
  • 9MFY22 Net Profit: Rs 30 cr (FY21: Rs 25 cr)

Investors may like eMudhra’s leadership position, solid financial track record, and high industry growth potential. But, sky-high valuations and rising competition may curb interest levels. FYI – the IPO was subscribed just 0.4x on day 1. 👎

Movers and Shakers 

Here’s a look at this week’s top Nifty 500 movers. Welspun Corp took the pole position after gaining +38%. 🥇 MRPL (+36%) hit a 4-year high on strong Q4 results. Amber Enterprises (-25%) had its worst-ever week since listing. Metropolis Healthcare (-15%) closed down for a sixth straight week. 📉 Check out their charts below:

Earnings Highlights 

  • Godrej Consumer Products: Revenue: Rs 2,916 cr; (+7% YoY) | Net Profit: Rs 363 cr; (-1% YoY)
  • JK Lakshmi Cement: Revenue: Rs 1,560 cr; (+12% YoY) | Net Profit: Rs 184 cr; (+20% YoY)
  • Surya Roshni: Revenue: Rs 2,301 cr; (+34% YoY) | Net Profit: Rs 83 cr; (+42% YoY)
  • Route Mobile: Revenue: Rs 626 cr; (+73% YoY) | Net Profit: Rs 46 cr; (+29% YoY)


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