June 22, 2022

Another Down Day

Tale of the Tape

Hello, everyone. Markets were back in the red. 🤦‍♂️

Nifty and Sensex dropped over a percent each as investors booked profits after yesterday’s massive upmove. Midcaps (-1.5%) and Smallcaps (-1.2%) also dragged lower. Over two stocks dropped for every one gainer. 🙊

Except for PSU Banks (+0.3%), all the other sectors ended lower. Metals (-4.4%) continued to melt. Nifty Real Estate Index (-2%) hit a fresh 52-week low. Check out their charts below. 📉

The rupee hit a new all-time low of Rs 78.39 against the US dollar. 👎

Dr. Reddy’s gained 2% intraday as investors cheered the company’s long-term growth vision. The stock ended flat tracking the overall market weakness. More details below. 📊

Jain Irrigation will merge its international business with Temasek-backed Rivulis Pte Ltd. The stock rallied +18% intraday. Here’s ET with more. 💰

Dixon Technologies dropped 3%. Global Brokerage firm Morgan Stanley sees a 22% downside from current levels! 📵

Zomato (+2%) will meet on Friday to consider the Blinkit acquisition. 🤝

Matrimony.com (+12%) will buy back 6.5 lakh shares at Rs 1,150 p/sh, +33% from today’s closing price! 💸

JMC Projects (+4%) won multiple orders worth Rs 874 cr. 🚧

Cryptos were covered in red. Bitcoin dropped 5%. Ethereum slipped 7%. Shiba Inu soared +15% ahead of the launch of Shibarium, the blockchain network of the Shiba Inu ecosystem. 🐕

Here are the closing prints:

Nifty	15,413	-1.4%
Sensex	51,822	-1.4%
Bank Nifty	32,845	-1.0%

Formula for Success

Dr. Reddy’s (-0.5%) is not screwing around. The pharmaceutical giant unveiled its future plans at its 2022 Analyst Day. 🔥 Here are the top takeaways:

– Dr. Reddy’s aims to diversify into high-growth areas like Biosimilars, Contract Development and Manufacturing, and Gene Cell Therapy under the “Horizon II” strategy. Dr. Reddy’s will invest heavily on R&D and pursue acquisition to scale up the new business. The company expects “Horizon II” to make up 25% of its topline by 2027. 💊

– Dr. Reddy’s is betting big on India and Europe. They aim to enter the top-5 club in India vs 10th as per current market share. Sales from the EU region +2x YoY in FY22. Expansion into more countries in the region plus new launches will act as key growth drivers. 📈

– Dr. Reddy’s guided for double-digit sales growth plus a 25% EBITDA margin and Return on Capital Employed (ROCE) over the medium term. They are also confident of more US FDA approvals on their drug pipeline and aim to launch three to five new products each year. ✅

Dr. Reddy’s positive business outlook comes as a breath of fresh air amidst recession fears. Dalal Street gave the announcement a big thumbs up as the stock jumped +2% intraday before cooling off to end flat. PS – Morgan Stanley sees a 20% upside from the current level. Watch out for this one. 🔥

Chartbusters

Real Estate stocks continued to slide lower. The Nifty Real Estate Index (-2%) hit a new 52-week low as investors fear demand slowdown. 😟

Inflation has pushed prices of day-to-day items higher which may force buyers to postpone any big-ticket purchases. Concerns over rising interest rates (i.e. higher interest lowers purchasing demand) plus moderation in Covid-related tailwinds like WFH also pose a serious risk. Q4 earnings for most companies were also disappointing as higher steel, cement, and fuel costs hurt profitability. 📊

Godrej Properties, DLF, and Kolte-Patil Developers slipped between 3%-4%. Check out their charts below: 📉

Stocktwits Spotlight

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