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Tale of the Tape 

Good evening everyone and a very Happy Independence Day in advance! 🇮🇳

Markets closed up for a fourth straight week! Strong economic outlook, positive global cues, and return of FII buying boosted sentiment. Midcaps (+0.7%) and Smallcaps (+0.3%) also climbed higher. 📈

Most sectors ended higher. Energy (+1.9%) and Metals (+1.6%) topped the list of gainers. FMCG (-1.1%) stocks snapped their 7-week gaining streak. 🔥

Divi’s Laboratories (-6%) was the top loser on Nifty after weak Q1 results. Read more below. 💸

Tata Elxsi, one of Vishal Mehta’s top momentum calls, rallied +8% to hit a new all-time high! Check out our YouTube channel for more awesome market content. Here’s the link: 💯   

Paytm dropped over 5% after advisory firm IiAS opposed the reappointment of founder Vijay Shekhar Sharma. 👎

Rainbow Children’s Medicare gained +4%. US brokerage firm JP Morgan sees a +20% upside from current levels. 🚀

AU Small Finance Bank slipped 2% after promoters sold 75 lakh shares. Buyers are unknown at the time of writing. 📉

Aditya Birla Capital (+2%) said that Abu Dhabi Investment Authority (ADIA) will invest Rs 665 cr in its insurance arm. 💰

Syrma SGS Technologies IPO opened for subscription today. More details below. ✌️

Cryptos cooled off after yesterday’s big upmove. Bitcoin fell over 2%. Ethereum traded flat. 🤗

Here are the closing prints:

Nifty 17,698 +0.2%
Sensex 59,462 +0.2%
Bank Nifty 39,042 +0.4%

Earnings Roundup 

Divi’s Lab fell 6%, the most in over 2 months, after a disappointing Q1. The company missed estimates on all fronts. Lower sales of Covid-related products and slowdown in generics business drove the underperformance. Margins hit an 8-quarter low led by higher input costs and other expenses. Lower tax and forex gains propped up profitability. Here are its key stats: 📊

  • Revenue: Rs 2,254 cr; +15% YoY (vs Est: Rs 2,326 cr)
  • EBITDA: Rs 854 cr; flat YoY (vs Est: Rs 963 cr)
  • EBITDA Margin: 37.6% (vs Est: 43.5%)
  • Net Profit: Rs 702 cr; +26% YoY (vs Est: Rs 698 cr)

Divi’s has always traded at a premium to its peers due to its best-in-class financials. But, concerns over slowing growth and margin pressure may be a tough pill to swallow for some. 🚨

Divi’s Laboratories is down 15% YTD.

IPOs Are Back!

Syrma SGS Technology IPO kicked off today. The price band is fixed at Rs 209-220 per share. The company plans to raise Rs 840 cr from the markets. 💸

Founded in 2004, Syrma is one of India’s largest electronic design and manufacturing solution companies. They are involved right from the prototype/concept stage to undertaking large-scale production on behalf of OEMs. In simple words, they are the Indian version of Foxconn. Fun fact: they are the leading producers of RFID tags used in contactless tracking, credit cards, etc. Syrma provides its services to over 270 customers worldwide in IT, automobile, and consumer products sectors. They have 11 manufacturing units and three research & development facilities across India. Syrma will use the IPO proceeds to expand its manufacturing footprint and fund day-to-day operations. 📈

Financial Snapshot: (FY22) 

  • Revenue: Rs 1,267 cr; +43% YoY 
  • EBITDA: Rs 126 cr; +26% YoY 
  • EBITDA Margin: 9.9% vs 11.3% YoY 
  • Net Profit: Rs 77 cr; +18% YoY 

Syrma is the fastest growing company in the electronic manufacturing solution industry. The company’s strong financial track record, decent valuations, and high industry growth potential are sure to excite investors. But, volatility in raw material prices and its impact on earnings is a key concern. FYI – this is the first IPO in nearly 3 months so interest levels may not be the highest. Let’s see how this goes. 👍

Big Picture: The GOI announced a Rs 34,000 cr package to boost domestic electronic manufacturing under the Make In India initiative. India’s electronic manufacturing services market is estimated to touch $135 billion by FY26. 💰

Movers and Shakers 

Here’s a look at this week’s top Nifty 500 movers. IGL took the pole position after rallying +22%. 🥇 Tata Chemical (+18%) hit a new all-time high on strong Q1 results. Sequent Scientific (-15%) had the worst week since Oct 2021. Natco Pharma (-14%) snapped its three-week gaining streak. 📉 Check out their charts below:

Earnings Highlights 

  • Apollo Hospitals Enterprise: Revenue: Rs 3,812 cr; (+1% YoY) | Net Profit: Rs 317 cr; (-35% YoY)
  • Aster DM Healthcare: Revenue: Rs 2,699 cr; (+13% YoY) | Net Profit: Rs 69 cr; (+54% YoY)
  • Grasim Industries: Revenue: Rs 28,042 cr; (+41% YoY) | Net Profit: Rs 1,933 cr; (+16% YoY)
  • Himadri Speciality Chemical: Revenue: Rs 1,047 cr; (+94% YoY) | Net Profit: Rs 39 cr; (+1.6X YoY)
  • Info Edge: Revenue: Rs 547 cr; (+67% YoY) | Net Profit: Rs 179 cr; (+16% YoY)