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Adani Rollercoaster!

Tale of the Tape 

Happy Friday guys. You’ve earned this one! 😇 

Markets closed at the day’s high as investors bought the morning dip. Nifty and Sensex jumped 1.5% each. Midcaps (-0.2%) and Smallcaps (-0.4%) continued to lag. 📉

Most sectors closed lower but the losses were muted. Energy (-1%) continued to tumble. Banking and Financials rallied between 2%-3% each. 🔥

Divi’s Lab (-12%) was trending #1 on Stocktwits after reporting disastrous Q3 results. More details below. 📊

Adani Enterprises dropped -35% intraday after being removed from Dow Jones Sustainability Indices. The stock rebounded from the lows (~50%) to end flat after Fitch and Moody’s retained their credit rating on Adani Group companies. 🚀

IndusInd Bank jumped +5% intraday on reports that promoter Hinduja Group will invest Rs 1,000 cr. 💸

Paytm was down 2% after Douglas Feagin resigned from the Board of Directors ahead of their Q3 results later today. 🔍

Teamlease Services will buy back 3.27 lakh shares at Rs 3,050 apiece: +30% from today’s closing price. ✌️

Earnings Reaction. Bank of Baroda jumped +4% on strong results. Crompton Greaves (-9%) hit a new 52-week low. 💰

Likhita Infra (+4%) won a Rs 130 cr order from the Gas Authority of India. 👍

Cryptos witnessed profit booking after yesterday’s big jump. Bitcoin and Ethereum were down 2%. Ripple and Cardano were flat. Matic dropped 4%. 🙈

Here are the closing prints:

Nifty 17,854 +1.4%
Sensex 60,841 +1.5%
Bank Nifty 41,499 +2.0%

Earnings Roundup 

Divi’s Lab (-14%) hit the lowest level since Aug 2020!!! The company missed Street estimates by a HUGE MARGIN on all counts. To be clear, markets were anyways expecting Q3 to be a bad quarter due to a high base of last year and weakness in the core business. But, this was even worse. The sharp drop in topline plus higher inventory costs drove overall underperformance. Here are its key stats: 📊

  • Revenue: Rs 1,708 cr; -32% YoY (vs Est: Rs 1,800 cr)
  • EBITDA: Rs 408 cr; -63% YoY (vs Est: Rs 600 cr)
  • EBITDA Margin: 23.9%; (vs Est: 33.3%)
  • Net Profit: Rs 307 cr; -66% YoY (vs Est: Rs 450 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 33% in the past year. 📉

Budget Investment Picks

Hey, guys. Here are 3 stock ideas that can give up to 25% return after the Budget announcement, according to SBI Securities. 💯

  • Rail Vikas Nigam Ltd (RVNL) is a government-owned infrastructure and engineering company. It was established in 2003 and operates under the Ministry of Railways. RVNL is focused on executing rail projects, including new line construction, railway electrification, and other rail-related infrastructure development. The company has a healthy order book of Rs 55,000 cr (4x FY22 sales). The FM announced a record Rs 2.4 lakh cr as railway budget which is a medium to long-term positive. SBI Securities sees +25% from current levels. 🛤️

  • KPIT Technology is a global giant in automotive technology solutions. They provide a wide range of services like product engineering, systems integration, and software development. KPIT is on track to beat its FY23 guidance given the robust deal pipeline. Favourable proposals in the budget for the automobile and IT sectors have sweetened the deal. SBI Securities has a target price of Rs 891 per share; indicating a +20% upside potential. 🚘

  • Indian Hotels is the largest hotel company in India. They operate a vast chain of luxury hotels, resorts, and palaces under the Taj, Vivanta and Gateway brand. Their unmatched scale has helped them gain the most from the travel boom. PS – last quarter the company posted an all-time revenue of Rs 1,686 cr; +52% YoY. The GOI had a special focus on tourism in this year’s budget. They announced dedicated schemes like Swadesh Darshan and Dekho Apna Desh to boost the domestic travel sector. This is a positive for Indian Hotels. SBI Securities has a target of Rs 360 per share; +16% from current levels. 🛎️

Movers and Shakers 

Here’s a look at this week’s top Nifty 500 movers. Ratnamani Metals & Tubes took the pole position after gaining +18%. 🥇Nykaa (+13%) snapped its four-week losing streak. To no one’s surprise Adani Group stocks were the top losers. Adani Total Gas dropped an insane 45%. Adani Enterprises crashed by 43%. ✂️ Check out their charts below: 

Earnings Highlights 

  • Aavas Financiers: Revenue: Rs 411 cr; (+20% YoY) | Net Profit: Rs 107 cr; (+21% YoY)
  • Crompton Greaves Consumer Electrical: Revenue: Rs 1,516 cr; (+8% YoY) | Net Profit: Rs 85 cr; (-42% YoY)
  • Karnataka Bank: Net Interest Income: Rs 835 cr; (+34% YoY) | Net Profit: Rs 301 cr; (+1.1X YoY)
  • GMM Pfaudler: Revenue: Rs 792 cr; (+23% YoY) | Net Profit: Rs 19 cr; (-41% YoY)
  • Bank of Baroda: Net Interest Income: Rs 10,818 cr; (+27% YoY) | Net Profit: Rs 3,853 cr; (+75% YoY)