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Tale of the Tape 

Happy weekend everyone. Markets closed up for a second straight week! 🍾 

Nifty and Sensex rallied over 1% each as the Fed rate hike fears eased. Midcaps and Smallcaps also witnessed healthy gains; +1.4%. The market breadth was extremely positive, with nearly three stocks gaining for every one loser. 🤑

Except for Energy (-1%), all other sectors ended in the green. IT (+2.6%) stocks pulled back after the recent rout. 📈

Ruchi Soya rallied over 4% intraday on superb Q4 results. Know more below. 📊

Auto stocks hit a 3 month high even as broader markets continued to bleed. But what’s driving the optimism? Read more below. 🔥

Tata Power (+1.2%) commissioned a 100 MW solar project in Maharashtra. ⚡

Zydus Life (+1%) received the clean chit from the US Food and Drug Administration (USFDA) for its injectable unit. ✅

INEOS Styrolution (+17%) approved a second interim dividend of Rs 105 p/sh. 👍

Paradeep Phosphates surprised the street with decent listing gains. The stock closed at Rs 45 p/sh; +6% from its issue price. 💪

Cryptos extended losses. Bitcoin traded flat. Ethereum dropped 3%. Matic, Solana and Cardano fell between 5%-7% each. 🚨

Here are the closing prints:

Nifty 16,352 +1.1%
Sensex 54,884 +1.2%
Bank Nifty 35,613 +1.5%

Top Gear

Auto stocks have quietly made a comeback in recent weeks. The Nifty Auto closed up 1.5% on Friday to hit a 3-month high even as broader markets continued to bleed. 🔥

What’s the deal bro? Oil prices, which’ve been on a tear, witnessed a sharp correction this week after the GOI announced a cut in excise duty. Taxes on petrol were reduced by Rs 8 per litre and on diesel by Rs 6. Fuel prices and auto demand have an inverse correlation. This means if oil prices rise, demand for cars and especially two-wheelers goes down as it increases their running cost. 🛵

Along with excise duty cut, the GOI imposed a 15% export duty on steel exports in a bid to control domestic prices. This would discourage companies from exporting more and boost local supplies. Higher supply means lower pricing. Economics 101! 📈

Steel is an essential raw material for making cars. Like oil, metal prices soared through the roof in the weeks following Russia’s invasion of Ukraine. This makes producing your favorite car or two-wheeler more expensive than before aka price hikes. Lower input costs will boost operating margins of auto companies, said global brokerage firm CLSA. But, the benefit will be higher for truck, bus, and tractor makers like Tata Motors and Ashok Leyland, they added. ✅

Big Picture: The past two years have been nothing short of a rollercoaster ride for the auto industry. Successive Covid waves and supply constraints offset strong pent-up demand and preference for personal transport. 👎 

Recent government measures plus easing supply bottlenecks are key positives. Will 2022 be the year for auto stocks? Only time will tell. 🤞

Earnings Roundup 

Ruchi Soya’s (+3%) fabulous turnaround story continues after a strong performance in Q4. Heathy demand, new product launches, and aggressive retail expansion boosted earnings growth. Price hikes and a higher share of premium products aided in margin expansion. Ruchi Soya announced a first-ever dividend of Rs 5 p/sh. Here are its key stats: 📊

  • Revenue: Rs 6,664 cr; +38% YoY 
  • EBITDA: Rs 406 cr; +63% YoY 
  • EBITDA Margin: 6.1% vs 5.2% YoY 
  • PAT: Rs 234 cr; -25% YoY due to tax credit of Rs 166 cr in the previous year 

Ruchi Soya will buy Patanjali’s food business for Rs 690 cr. The latest move will increase the share of the high-margin FMCG/Foods business to its overall revenue. Patanjali’s unrivaled nationwide distribution network, strong brand recall, and experienced management would improve operating efficiencies and boost profitability. FYI – Ruchi Soya recently turned debt free after raising Rs 4,300 via a follow-on public offer (FPO). 💯

Ruchi Soya is +32% YTD.

Movers and Shakers 

Here’s a look at this week’s top Nifty 500 movers. AIA Engineering took the pole position after gaining +16%. 🥇 Astrazeneca Pharma (+15%) posted its best weekly gain since April 2021. Jindal Stainless (-24%) hit a 10-month low. Vardhman Textiles (-18%) closed down for the fifth time in six weeks. 📉 Check out their charts below:

Earnings Highlights 

  • Hindalco: Revenue: Rs 55,764 cr; (+38% YoY) | Net Profit: Rs 3,851 cr; (+99% YoY)
  • Zee Entertainment Enterprise: Revenue: Rs 2,361 cr; (+19% YoY) | Net Profit: Rs 182 cr; (-33% YoY)
  • India Cements: Revenue: Rs 1,418 cr; (-4% YoY) | Net Loss: Rs 11 cr;
  • Motherson Sumi: Revenue: Rs 17,185 cr; (+1% YoY) | Net Profit: Rs 122 cr; (-83% YoY)
  • GAIL: Revenue: Rs 27,328 cr; (+73% YoY) | Net Profit: Rs 3,474 cr; (+37% YoY)


Here’s all the companies that will announce their Q4 results over the weekend: