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Binance Disowns WazirX

Tale of the Tape 

Happy Monday everyone, and welcome back to The Daily Rip! 🤗   

Nifty and Sensex rebounded sharply after opening lower to close near the day’s high. Midcaps and Smallcaps underperformed, +0.3% each. The advance-decline ratio was split evenly. ✌️

Most sectors ended in the green. Metals (+1.3%) and Energy (+1.2%) stocks were the key sources of strength. IT closed flat. 😑

Paytm rallied +6% despite losses widening in Q1. Read more below. 🚀

Tata Motors (+1%) will buy Ford’s Sanand plant for Rs 726 cr. 🏭

Earnings reaction. BPCL (-3%) was the top loser on Nifty after reporting its first net loss in 8 quarters. SBI tripped -2% after Q1 net profit missed Street estimates. 📉

Indostar Capital tanked 6% after auditor Ernst & Young found irregularities in its CV loan portfolio. 🚨

Alkem Labs fell 4% after a double downgrade by Jefferies. The foreign brokerage firm sees a 13% downside from the current level. 💣

Blue Star (+1%) wins new orders worth Rs 375 cr. 📈

Binance distances itself from WazirX after the Enforcement Directorate freezes its assets. More details below. 💔

Cryptos crept higher. Bitcoin gained +3%. Ethereum rose 2%. Cardano, Solana, and Polkadot jumped between 4%-6% each. 💯

Here are the closing prints:

Nifty 17,525 +0.7%
Sensex 58,853 +0.8%
Bank Nifty 38,287 +0.8%

Earnings Roundup 

Paytm’s (+6%) Q1 results beat Street estimates. Topline rose 88% YoY led by solid growth in the lending business. Paytm gave out fresh loans to 85 lakh customers, up ~6x over the previous year. FYI – Bajaj Finance issued 74 lakh loans in Q1. However, it is important to note that Paytm has a higher share (60% of loan value) of risky Buy Now Pay Later. 💸

Gross Merchandise Value (GMV) more than +2x to Rs 3 lakh cr. Average monthly transacting users (MTU), which is the number of unique users with at least one successful payments transaction in a month, grew 49% YoY to a record 7.5 cr. But, higher salaries and advertisement expenses widened the net loss. Check out its key stats:  📊 

  • Revenue: Rs 1,680 cr; +88% YoY (Est: Rs 1,690 cr) 
  • Net Loss: Rs 634 cr; vs Net Loss: Rs 371 cr YoY (Est: Net loss of Rs 680 cr)

Paytm’s solid operating metrics, sharp drop in processing charges, and focus on profitability are key positives, said experts. Paytm remains confident of turning breakeven aka no profit no loss on an operational level by September 2023. The company believes it can achieve this feat without compromising any of its growth plans. 😎 

Bottomline: Paytm is up ~40% from its May 2022 lows. A bullish growth outlook and cheap valuations boosted sentiment. PS – Goldman Sachs sees 35% from current levels! But, fears of high-interest rates impacting credit growth plus regulatory changes remain key concerns. 👀

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No Longer Friends

Binance has broken all ties with India’s largest crypto exchange, WazirX!!! 💔

Here’s a quick recap? Binance announced they had acquired WazirX, the 1st acquisition in the Indian crypto space then, in a blog post in 2019. Both parties posed together for the media and gave interviews sharing their strategic goals. Binance called the move a part of its vision to enhance its growing list of global partners. WazirX called it an opportunity to expand overseas, a feat unimaginable back then as RBI’s harsh ruling broke the crypto industry’s back. But, as things stand, the deal NEVER WENT THROUGH! 🤯

What’s the matter bro? Binance CEO Changpeng Zhao (CZ) clarified that Binance doesn’t own any equity in Zanmai Labs, the parent company of WazirX. Binance only provides wallet services to WazirX as a technology solution. CZ’s tweets distancing Binance from WazirX comes at a time when the crypto exchange is undergoing money laundering investigation. Last week, the Enforcement Directorate (ED) froze WazirX’s assets worth Rs 65 cr. 🚨

Big Picture: The latest setback for WazirX comes at a time when crypto trading volumes are at an all-time low. The steep tax on crypto profits + 1% TDS on every transaction has pushed the nascent industry against the wall. The crypto winter triggered by the collapse of Terra Luna and constant calls for an outright ban by the RBI has only made matters worse. 😵

Earnings Highlights 

  • Bharat Petroleum Corporation: Revenue: Rs 1,38,754 cr; (+54% YoY) | Net Loss: Rs 6,148 cr;
  • State Bank of India: Net Interest Income: Rs 31,196 cr; (+13% YoY) | Net Profit: Rs 6,068 cr; (-7% YoY)
  • Mahanagar Gas: Revenue: Rs 1,613 cr; (+1.3X YoY) | Net Profit: Rs 185 cr; (-9% YoY)
  • Nykaa: Revenue: Rs 1,157 cr; (+41% YoY) | Net Profit: Rs 5 cr; (+33% YoY)
  • Adani Ports: Revenue: Rs 4,638 cr; (-1% YoY) | Net Profit: Rs 1,072 cr; (-16% YoY)


We’re in the thick of the earnings season. Here’s all the companies that will announce their Q1 results on Wednesday: