Market Capsule 3rd August '24 | Bears Loading? Weak US jobs data fuel fears

On August 2, Wall Street saw significant declines, with the S&P 500 set for its worst day since 2022 and the Nasdaq dropping 3%. The S&P 500 fell 2.5%, while the Nasdaq dropped over 10% from its July peak, hitting correction territory. This drop was fueled by weak July jobs data, with only 114,000 new jobs and an unemployment rate increase to 4.3%, raising recession fears. The sell-off was worsened by negative forecasts from Amazon and Intel and a contraction in manufacturing activity.

The Nikkei index of Japan also dropped 5.81%, its worst day since March 2020. This decline followed the Bank of Japan's decision to raise its policy rate to 0.25% and cut bond purchases by 400 billion yen per quarter, reducing monthly JGB buys to 3 trillion yen from January 2026.

Due to these various international developments, Indian indices are expected to open lower on Monday with Gift Nifty Indicating a 100+ point cut. In the coming week, Nifty 50 is expected to test its 20 Day Moving average which is standing at 24,550 with next technical support at 24200. Despite the expected volatility, sectors like pharmaceuticals are likely to demonstrate resilience. For investors, Valuations will be a key focus area as they navigate the evolving market conditions.

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Charting the Pulse of Indices:

A) Heatmap

Heatmap helps investors quickly understand the performance of multiple stocks or sectors in a single view. Color coding, with varying shades indicating the degree of movement - red for declines, green for gains, and sometimes grey or other colors for little or no change. Heatmaps are effective for spotting market patterns and can be a time-saving resource in investment analysis.

B) Market Breadth

A) Nifty 500

Analyzing market breadth is important as it provides insight into the underlying strength or weakness of the market, beyond just looking at benchmark indices. Breadth measures the percentage of securities in NIFTY 500 surpassing specified moving averages over the specified period. Comparing the market breadth of nifty 500 during the previous week's trading sessions, we can analyze that number of stocks above key moving average support areas are reducing by the end of week. This can be considered as a sign of weakness if change is seen to be significant.

Blockbuster Results

• Zomato Ltd's Q1 FY25 revenue grew 74% YoY to ₹4,206 crore, while net profit increased to ₹253 crore from ₹2 crore, with improved profitability in Blinkit.

• T.V. Today Network Ltd reported strong Q1FY25 results with revenue up 40% YoY to ₹312 Cr, OPM at 22%, and PAT surging 466% YoY to ₹51 Cr.

• S J S Enterprises Ltd reported strong results with revenue up 60.9% YoY to ₹188.62 crore, EBITDA up 60.8% YoY to ₹50.50 crore, and PAT up 56.6% YoY to ₹28.24 crore.

• Selan Explorations Technology Ltd reported strong results with revenue up 126% YoY to ₹63 crore, OPM at 37%, and PAT up 260% YoY to ₹18 crore.
  

• Zaggle Prepaid Ocean Services Ltd reported impressive results with revenue increasing 113% YoY to ₹252 crore, an OPM of 9%, and PAT rising 112.5% YoY to ₹17 crore.

• Pondy Oxides & Chemicals Ltd reported Q1 FY25 revenue of ₹445 crore (up 37% YoY), EBITDA margins of 5%, and PAT of ₹13 crore (up 216% YoY).
  

Good Results:

• HPL Electric & Power Ltd saw 22.5% YoY revenue growth to ₹392.91 Cr in Q1 FY25. EBITDA rose 40.19% to ₹56.13 Cr, with margins up to 14.29%. PAT increased 145% to ₹17.03 Cr.

• Suraj Estate Developers Ltd reported robust Q1FY25 results with revenue up 70% YoY to ₹134 Cr, OPM at 47%, and PAT surging 100% YoY to ₹30 Cr.

• SML ISUZU Ltd reported strong Q1 FY25 results with revenue up 18.13% YoY to ₹746 Cr, OPM at 11%, and PAT surging 43.75% YoY to ₹46 Cr.

• Computer Age Management Services Ltd reported Q1 FY25 revenue up 26.8% YoY to ₹331 crore, with MF revenue up 26.3% and Non-MF revenue up 30.7%. EBITDA grew 36.6% YoY to 45.4%, and PAT rose 41.8% YoY to 31.5%.

• Tinna Rubber & Infrastructure Ltd reported Q1 FY25 revenue up 69% YoY to ₹136 crore, with OPM at 18% and PAT up 128% to ₹16 crore.

• Hind Rectifiers Ltd reported robust Q1FY25 results with revenue up 38.89% YoY to ₹135.53 Cr, OPM at 10.68%, and PAT surging 264.7% YoY to ₹6.93 Cr.

• Aptus Value Housing Finance India Ltd reported PAT of ₹172 crore (21% YoY growth), AUM of ₹9,072 crore (27% YoY growth), RoA of 7.73%, and RoE of 18.13%.

• Whirlpool of India Ltd reported Q1 FY25 revenue of ₹2,384 crore (up 23.97% YoY), OPM of 8%, and PAT of ₹134 crore (up 116% YoY).

• Suryoday Small Finance Bank Ltd reported Q1 FY25: Net interest income: ₹293.2 crore (up 30.5% YoY). Pre-Provisioning Operating Profit: ₹144.3 crore (up 23.2% YoY).
  

1. Veranda Learning Solutions Ltd

2. L T Foods Ltd

3. ITD Cementation India Ltd

4. Wockhardt Ltd

Corporate Developments

Order Wins:

• NBCC (India) Ltd's subsidiary, HSCC (India) Limited, received a work order worth approximately ₹411.45 crores. Link

• Aurionpro Solutions Limited won a US$ 3 million deal to modernize corporate processes for a leading Malaysian bank, to be implemented over 15 months. Link

• Autoline Industries secured a ₹204 crore contract with Tata Motors Passenger Vehicle Limited to manufacture tools and supply sheet metal parts and assemblies. Link

• Larsen & Toubro Ltd wins multiple orders (Large*) to build grid elements forming backbone of clean energy transition.  Link

• SRM Contractors Ltd received a Letter of Acceptance (LOA) for a PBMC project from NHAI, valued at ₹171.24 crores. Link

• Styrenix Performance Materials Ltd awarded a contract to Toyo Engineering for expanding a new HIPS line at Dahej, increasing capacity to 150 KT per annum.  Link

• Power Mech Projects Ltd received a ₹142.50 crore order from Meenakshi Energy Limited in Nellore, Andhra Pradesh. Link

• Shakti Pumps (India) Limited received a Letter of Intent from the Department of Agriculture, Uttar Pradesh, for 12,537 pumps under the PM-KUSUM scheme, valued at approximately ₹558.16 crores. Link
  

Share Splits/Bonus Issue:

• Rushil Decor Ltd has planned a stock split to be executed on 9th August, 2024, which involves reducing the face value of its shares from ₹10 to ₹1. Link

• Filatex Fashions Ltd will execute a stock split on 9th August, 2024, reducing the face value of its shares from ₹5 to ₹1.. Link

• Balmer Lawrie Investment Ltd has scheduled a stock split for 9th August, 2024 reducing the face value of its shares from ₹10 to ₹1. Link

• Cellecor Gadgets Ltd has planned a stock split on 9th August, 2024, cutting the face value of its shares from ₹10 to ₹1. Link

• Rajoo Engineers Ltd has announced a bonus Issue with a record date set for 9th August, 2024, to be issued in a 1:1 ratio. link

• Gujarat Themis Biosyn Ltd has announced a bonus Issue with a record date set for 9th August, 2024, to be issued in a 1:2 ratio. link

• GRP Ltd has announced a bonus issue in a 3:1 ratio, with the record date set for August 12th, 2024. link
  

Agreements:

• Zaggle Prepaid Ocean Services Limited has entered into a customer service agreement with Baroda BNP Paribas Asset Management India Private Limited. Link

• Godrej Agrovet signs a definitive agreement to acquire Tyson’s stake in Godrej Tyson Foods Limited. Link

• Uno Minda Limited has announced a Technical License Agreement with Aisin Corporation, Japan, for the manufacture and sale of sunroofs. Link

• TP Parivart Limited signs Power Delivery Agreement with Tata Steel Limited to set up 70 MW group captive solar plant in Maharashtra. Link

• Spectrum Electrical Industries Ltd's subsidiary, Pristine IT Code Private Limited, has signed an MOU with Workflowed Solutions Private Limited. Link

• GRSE Ltd. and Medha Servo Drives Pvt Ltd have signed an MoU for joint manufacturing of advanced electrical and electronic systems. Link

• Shriram Finance Limited has signed a co-lending agreement with Central Bank of India for MSME loans under RBI guidelines.  Link 

• Neural Garage and UFO Moviez have announced a partnership to transform film production and viewing with their Generative AI technology, "VisualDub.". Link

Acquisitions & Mergers:

• CESC Ltd has acquired 63.91% of Purvah Green Power Private Limited, making it a direct subsidiary of CESC Ltd. Link

• eMudhra Inc, a wholly owned subsidiary of eMudhra Limited, has acquired 100% of Sendrcrypt Technologies Inc for $3 million. Link

• Exicom Power Solutions B.V, a WOS of Exicom Tele-Systems Limited, has acquired 12,000 ordinary shares of Tritium Power Solutions Pty Ltd from Mr. Raj Kumar for $120, representing 100% of the paid-up share capital. Link

• Himadri Clean Energy Limited, a wholly owned subsidiary of the Himadri Speciality Chemical Ltd , has acquired 100% of Himadri Green Technologies Innovation Limited. Link
  

Joint Venture:

• Tube Investments of India Limited has signed a joint venture agreement with Classic Legends Private Limited to license "BSA" trademarks for motorcycle manufacturing and sales in India.  Link
  

Other Important News:

• Kothari Industrial Corporation Limited (KICL) has secured a 30-year licensing deal with Kickers for India and eight other countries. Link

• Airtel expands its Wi-Fi service across an additional 0.7 million households in Haryana. Link

• Club Mahindra Introduces Six Luxurious Villas in North Goa, Perfect for a Serene and Adventurous Family Getaway. Link

• MOIL achieved its highest quarterly turnover and sales for April-June 2024, with revenue of ₹492.84 crore and sales of 4.53 lakh tonnes. Link

• Alembic Pharmaceuticals receives USFDA Final Approval for Nelarabine Injection, 250 mg/50 mL (5 mg/mL) (Single-Dose Vial).Link

• Marksans Pharma Limited’s wholly owned subsidiary in UK Relonchem Limited, receives Marketing Authorization for the product Levonorgestrel 1.5 mg Tablets. Link

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That's all for now! I hope you enjoyed the content. Do share your comments below! Disclaimer: Any stock or company discussed above should not be considered as a Buy/Sell recommendation. We personally or our clients might or might not have a position in any of the stocks discussed. This newsletter is purely is for educational purposes only.