Heading For New Highs!

Tale of the Tape

Howdy folks. Markets hit the highest level since the start of 2023!!! 🚀

Nifty and Sensex extended their unbeaten streak to day 4. Midcaps and Smallcaps rose over 1% each to cap a strong overall performance. 📈

Not a single sector ended lower. Real Estate (+1.6%) and Metals (+1.5%) topped the list of gainers. FMCG and Oil & Gas stocks also witnessed healthy gains; +1% each. 💪

What is Bajaj Finserv’s game plan to crack the (overcrowded) mutual fund industry? More detail below. 📊

Consumer goods companies are on fire! Find out what’s driving this rally below. 💯

Adani Group stocks were in focus after BSE and NSE increased the circuit filter on four stocks. Adani Power rallied ~5%. Adani Transmission gained +3%. 👍

Can Fin Homes surged +5% intraday after a HUGE UPGRADE by global brokerage firm Jefferies. PS – they see an additional +13% upside from current levels. ✅

Maruti launched SUV Jimny starting at Rs 12.74 lakh ex-showroom, Delhi. Here’s more details. 🚙

Torrent Power hit a new 52-week high after winning a Rs 27,000 cr order from the Maharashtra Government. ⚡️

MTNL was locked in a 10% upper circuit. Reports indicate that GOI has approved a Rs 89,047 cr revival package for state-run BSNL. PS – MTNL is a subsidiary of BSNL. ☎️

Hindustan Aeronautics rose 2% on reports of a deal with General Electric to co-produce jet engines. 💰

Tata Consumer Products climbed 4%. The company said that they are open to acquisitions and expanding into new categories. 🤝

IKIO Lighting IPO got oversubscribed +5x on day 2. 💸

Here are the closing prints:

Nifty	18,726	+0.7%
Sensex	63,142	+0.6%
Bank Nifty	44,275	+0.3%

Sanjiv Bajaj’s New Target

The newest kid on the mutual fund block is here! Bajaj Finserv’s asset management company (AMC) arm is rolling out 7 schemes, spread across debt and equity categories. The house of Bajaj is a giant in the world of non-bank lending, but can it make a mark in mutual funds? Here’s a look at the lay of the land. 😎

First, its strengths. The company has 100 million customers that take out loans, buy insurance & use its co-branded credit cards. There are no laws against selling MF products to borrowers, so that gives it a ready head start. It also has great digital distribution reach already, a major POSITIVE. ✅

It is also clearly swinging hard: new entrants usually start small. They focus only on equity (Samco & WhiteOak) or debt (Trust MF). Others like Navi concentrate only on passive funds. Bajaj, however, wants differentiated schemes. Chairman Sanjiv Bajaj insists there will be no large-cap fund that will hug the index for 75%-80% of its portfolio. 📈

So, a volume play it is. While distribution reach + the commission & expense game are important, performance is 90% of the biz. Bajaj has roped in Canara Robeco MF’s Nimesh Chandan as its chief investment officer. Ultimately, MF houses have access to the same tools and same info. It’s decision-making that determines whether they sink or swim. 🤓

Big Picture: The mutual fund industry is BOOMING. Average assets under management have grown 74% from March 2018 to a whopping Rs 40 lakh crore in December 2023. But not all fund houses make money. Last year, only 25 out of 42 fund houses made profits. Bajaj needs to break into that list. 💰

Last Call!

Hey everybody. Here’s a friendly reminder that our Twitter Spaces session with Avinash Gorakshakar, Head of Research, at Profitmart Securities is happening this evening at 7:00 PM! Tune in without fail as we discuss global macros, RBI’s rate decision, top sectors to bet and tons more! 💯

Here’s the link to join: https://twitter.com/i/spaces/1djGXlQZvmkGZ

The Great Indian Consumer

Britannia and Nestle India hit an all-time high in intra-day trading after a rally over the last five days! Both FMCG firms killed it in Q4. But the bigger question that investors are betting on: will FY’24 be THE year that consumer spending pops off? Many, including Morgan Stanley, believe so. The brokerage firm says consumer sentiment in India has DOUBLED from May 2020 to May 2023. 📈

For the unaware: 2021 & 2022 have been rough sailing for FMCG firms. Covid reduced demand, and then high inflation set in with raw material costs spiraling due to the Russia-Ukraine war. 🤕

But things have eased in 2023 so far, with the Nifty FMCG Index up 17% YTD. Why? As Morgan Stanley notes, for one, rural demand is recovering as rural labour markets improve. Also, it estimates CPI (consumer inflation) to be lower at 5.2% in FY’24. This is due to lower prices for edible oil, fertiliser, diesel and electricity. ✅

Meanwhile, experts say that industry leader Hindustan Unilever will have a GREAT FY’24. Brokerage firm Nomura believes it will be the year of “volume growth and margin recovery”. For Q1 FY’24, it estimates that HUL’s homecare vertical will see a 15% YoY growth in volumes. The beauty + personal care segment will see 8% YoY growth, while food & refreshments will only grow 4% YoY. This is partly because while global oil prices are down (which reduces raw material costs for shampoos or detergents), prices of commodities like milk or tea will take a few more months to chill. 👀

Stocktwits Spotlight

Ambuja Cement saw a massive breakout with high volumes. Huge shoutout to Saurabh Nandi for catching the move early (as always). Follow him for more awesome trading insights and add $AMBUJACEM.NSE to your watchlist and track its performance. Here’s the link: https://bit.ly/3IWOxgY.

Disclaimer: All ideas shared by Saurabh Nandi are for educational purposes. Saurabh Nandi is neither SEBI registered nor an investment advisor.