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Nifty Above 20K!!

Tale of the Tape 

Good evening everyone. The Nifty reclaimed the 20k mark today! Also, Indian markets hit the $4 trillion market cap for the FIRST TIME EVER. 🚀

Positive global cues boosted both the Sensex and Nifty, which were up +1% each. Midcaps (+0.8%) and Smallcaps (+1%) also saw healthy gains. The advance-decline ratio favoured the bulls (3:2). 🐂

Most sectors ended in the green. Auto (+1.6%), Banks (+1.5%) and IT (+1.5%) supercharged the rally. Real Estate (-0.5%) and Media (-0.1%) were the only two losers. 👍

Brokerage firm JM Financial sees a 9% upside to this midcap stock. Read our analysis below. 🔍

Aster DM Healthcare was on fire today after restructuring its Middle East biz. IREDA had a bumper market debut. More details below. 💯

Zomato (+2%) gained after the Ant Group sold its entire 3.4% stake in a mega block deal. The move will clear an overhang on the stock. 📈

Manappuram Finance (+6%) jumped as gold prices hit an all-time high in India today. 🥇

Aether Industries cracked 8% after it reported a fire at its Surat manufacturing facility. 🚒

Bharat Heavy Electricals was up +6%. The defence PSU said it secured a Rs 2,956 cr contract from the GOI. 💣

Yatharth Hospitals CRASHED 12% after the Madhya Pradesh govt ordered a takeover of its Ramraja hospital. 🧑‍⚖️

Bharti Airtel hit a record high of Rs 1,000 p/sh. The stock has been in focus over reports its subsidiary Bharti Hexacom is prepping for an IPO. 😍

Here are the closing prints:

Nifty 20,096 +1.0%
Sensex 66,901 +1.1%
Bank Nifty 44,566 +1.6%

Portfolio Worthy

PCBL is red hot! The stock is up 2x in 2023 so far, easily beating the Nifty Midcap 100 Index’s growth in the same period. It also was +4% today after acquiring a chemicals company for a cool Rs 3,000-cr. We know what you’re thinking: how much more juice is left in the stock? 🤓

About the company: Founded in 1960, PCBL is India’s BIGGEST producer of ‘carbon black’, a chemical material used in tyres, plastics, toners, inks and batteries. It has over 120 customers spread across 50+ countries, and five manufacturing plants across India. 📊

The bull case for PCBL is based on three big factors. Firstly, Chinese competition is expected to get less stiff because higher raw material costs in the country will blunt their advantage. Secondly, the Ukraine war has resulted in a whopping 40% supply shortage across the EU. In July 2024, a complete import ban on Russian carbon black will go into effect. This opens HUGE export opportunities for PCBL, which recently opened a new greenfield plant in Chennai. 🏭

Finally, there’s the massive electric vehicle play. Carbon black is starting to be used in Li-ion batteries, with PCBL increasing its R&D focus in this area. FYI – brokerage firm JM Financial expects carbon black demand for EVs to QUADRUPLE by 2030. This could be a huge boost for PCBL, especially because the grades required for EVs have 14x-15x better margins compared to traditional carbon black. 💰

Big Picture: A large part of PCBL’s future growth depends on whether it can expand beyond the tyre biz, which is its current core cash cow. Meanwhile, while commodity price fluctuations will hurt China the most, PCBL won’t remain unscathed either. JM Financial  projects its top line and PAT to grow at a CAGR of 12% over the next three years. The brokerage firm also has a target price of Rs 290 p/sh; +9% from current levels. 🔥

FYI – We covered PCBL in our Diwali Picks video. Spoiler alert! It overshot the price target mentioned there by 3%. Check out the rest of the picks here –

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Stocktwits Specials

We all miss the legendary investor – Rakesh Jhunjhunwala! In this video, we cover his top holdings and latest portfolio updates along with fundamental and technical views on the same.

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Bullets From The Day 

📈 Aster DM Healthcare ZOOMED 17% after approving a deal to sell its Middle East biz for a whopping $1 billion. FYI – the transaction is effectively a complex, restructuring exercise. Its ‘Gulf Cooperation Council (GCC)’ region vertical is being sold to Dubai-based Alpha GCC Holdings. Alpha, in turn, is owned by the promoters of Aster and the Middle Eastern PE Fund called Fajr Capital.

Why go through this hoopla? While the GCC business is much bigger than its India vertical, it’s also not really growing as the region is saturated and insurance-driven. The separation will allow each vertical to be more fairly valued and continue growing without the one weighing the other down.

That said, there’s another key reason why the stock is on fire. Aster’s management has said that a “significant portion” of the $1.01 billion earned from the stake sale will be used as a dividend payout. This will be the FIRST dividend distribution since its 2018 listing. Investors rejoice!

🤯 Indian Renewable Energy Development Agency (IREDA) made a GREAT market debut. The stock listed at Rs 50, a whopping 56% premium to the issue price of Rs 32 p/sh. The listening beat out all estimates: grey market data suggested a more modest 12%-13% premium. FYI – the bumper debut may have partly been due to reports suggesting the GOI would grant ‘Navratna’ status to IREDA. Navratna PSUs are generally granted more management autonomy and help enhance the market perception of the company.

For the unaware, IREDA is a GOI-run NBFC that primarily funds renewable energy & energy efficiency projects. Of its current Rs 47,200 cr loan book, 30% is with solar energy projects, 23% with wind energy and 12% to small hydro. Most experts currently suggest that investors hold onto the stock for the long term.

Stocktwits Spotlight

Artha Capital recently shared their techno-fundo analysis of PVR Ltd on Stocktwits. Follow them for more amazing stock analysis and add $PVRINOX.NSE to your watchlist to track its performance. Here’s the link:

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