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Nifty & Sensex again failed to hold on to their morning gains and nosedived in the final hour of trade to end flat. Are we in a "sell on rise"market? Midcaps (+0.5%) and small caps (+0.9%) had a solid day of gains. The advance-decline ratio was in favor of the bulls (3:2).
It was a mixed-bag kinda day for sectors. Energy (+1.1%) and auto (+0.6%) were the top gainers. FMCG (-1.1%) and pharma (-0.6%) witnessed some selling.
Colgate Palmolive India gained +5% after a strong Q1 show. Meanwhile, Varun beverages cracked -7%.
Akums Drugs and Pharmaceuticals IPO kicked off today.
Idea Forge, NTPC, and Exide industries all saw big movements today.
Power grid corporation (+2%) hit an all-time high after upping its capex guidance for FY25 to Rs 18000 cr.
TTK Prestige (+3%) will consider approving a share buyback proposal on August 2.
New India Assurance (+2%) was up after reports said it would hike premiums on some products by 10%.
PNB Housing Finance (-2%) was in focus after 3.4 cr shares (13.1 % equity ) changed hands in a block deal, reports say Carlyle was the likely seller.
ORDER WINS: ITD Cementation (+3%) bagged a Rs. 1237 cr contract to build a residential colony in new delhi. Meanwhile, RVNL rallied +3% intraday after winning Rs. 739 projects in Himachal Pradesh.
Earning Roundup
Colgate Pamolive's (+6%) Q1 results beat street estimates! high single-digit volume growth in its key toothpaste vertical + increased demand from rural markets helped boost the overall top line. Rural demand beats urban markets for the second quarter in a row! Finally, despite higher ad expenses ( +10% YoY), the company's margin grew with the help of price hikes & strict cost control measures.
BIG PICTURE: Despite the lack of a consumption stimulus in the budget, FMCG firms are benefiting from a steady rural revival, helped by a good monsoon this time around!
While Colgate had warned that margins could take a hit in FY25, as it focused on volume growth, that has not happened just yet!
Here is its Q1 report card:
- Revenue: Rs 1497 cr, +13% YoY (vs Est: Rs 14230 cr)
- EBITDA: Rs 508 cr, +22% YoY (vs Est: Rs 470 cr)
- EBITDA margin: 34% vs 31.6% last year
- PAT: Rs 364 cr, +33% YoY (vs EST: 332 cr)
Colgate Pamolive india is +36% YTD
Varun Bevarges: Q2 results mostly met streets estimates. Domestic volumes were up +23% YoY on the back of strong demand, offsetting the flat growth in the zimbabwe market. Operating margins also saw a bump, helped by better procurement strategies and a shift to lighter-weight packaging. The company also announced a 2:5 stock spilit.
If the result were decent, why was the stock the top loser on the NSE 500? This was mostly due to profit-booking. Varun Beverages has nearly doubled in the last year and hit an ATH just yesterday. It is also trading at eye-watering valutions right now, providing a decent exit point for investors.
Here are its Q2 stats, the company follows a jan-dec financial reporting cycle:
- Revenue: Rs 7197 cr, +29% YoY (vs Est: Rs 7344 cr)
- EBITDA: Rs 1991 cr, +32% YoY (vs Est: Rs 1976 cr)
- EBITDA margin: 27.7% vs 26.9% last year
- PAT: Rs 1262 cr, +26% YoY (vs EST: 1276 cr)
Varun Beverages is +28% YTD.
IPO REVIEW
AKUMS DRUGS & PHARMACEUTICALS IPO REVIEW
Akums drugs & pharmaceuticals IPO opened for subscription today! the price band is fixed at rs 646-679 p/sh. The company aims to rise rs 1857 cr from the IPO.
Founded in 2004, akums is india's biggest pharma 'contract development & manufacturing organisation (CDMO). The company basically makes drugs and other ingridients for many generic pharma firms including sun pharma, cipla and Dr Reddy's
Fun Fact: Akums can make nearly 50 billion finished dosages per year through its 11 manufacturing facilities, which is insane. While the buisness has being doing ok. Its financials tooks a hit because of a share buyback oblization granted to a key PE investor.
The IPO'S fresh issue is around Rs 680 cr, the rest being done through the 'offer for sale' route. The money raised will mostly be used to pay off debt.
FY24 Snapshot:
- Revenue: Rs 4178 cr, +14% YoY
- EBITDA: Rs 123 cr, -64% YoY
- EBITDA margin: 3% vs 9% YoY
- PAT: Rs 1 cr, -99% YoY
BIG PICTURE: while the core COMD biz is fine, Akums recent expansion into APIs, which is still making losses, has eaten into margins & bottomline. Key triggers to watch out for include how quick it can turn the API vertical around and its expansion into global markets. International buisness accounts for only 6% of the topline right now.
But, overseas clients come with juicy 21% margins vs just 15% for local indian contracts. The IPO's pricing is on the expensive side, but current grey market data suggest it may list at a cool 30% premium!
CHARTBUSTERS
1) Idea forge technology crashed -11% after posting awful Q1 results. Its profit nosedived -90% YoY on the back of weak drone sales and esclating raw material costs. Its EBITDA margins dropped to just 4% in Q1 vs 29% last year. The stock is down -33% in the last year.
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| Idea forge technology |
2) NTPC hit a record high after jefferies hiked its target price for the stock to Rs 485 p/sh vs Rs 445 p/sh earlier. The PSU firm also reported solid Q1 numbers with a double-digit bump in topline and bottomline. Experts says the long-term visibility for both thermal & nuclear segments look strong.
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| NTPC STOCK CHART |
3) EXIDE INDUSTRIES cracked -4% after its Q1 numbers missed street estimates! Escalating raw material costs also weighed on the firm, with its topline up just +6% YoY. The stock also hit by profit-booking today. Exide has more than doubled in the last year.
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| EXIDE STOCK CHART |
Here are the closing points:
Nifty 24857 +0.1%
Sensex 81455 +0.1%
Bank Nifty 51499 +0.2%
