India Market Wrap 9 July 2023

This week's market action in less than 5 mins!

The about page for TheWrap is here. Here are your insights from everything that went down this week in Indian equity markets 📈.

This week’s market action in one line

Smart meters for everybody, pharma sector takes a backseat, Hero attacks Eicher’s turf, metals, financial stocks and oil marketing companies enter the bull party 🐃

The Wrap #002

India Market Breadth week ending 9th July 2023

The market started this week with large announcements for smart meter tender wins - mainly by Genus, HPL Power and Tata Power - those were the winning trades this week including the proxy plays for smart meters - Shivalik Bimetal and Permanent Magnets.

Very few market participants were paying attention to the reforms made by government in power market - something we have written in detail about going all the way back in late 2021.

The one sector on the cusp of regulatory transformation

This is only the beginning of these reforms - as evident by Genus forming a $2 Billion partnership with GIC. Here is Genus’s promoter explaining their partnership with GIC in detail.

Beyond smart meters expect trickle down effects in transmission lines, cables, net metering and rooftop solar. The government is serious about reforming the ailing discoms while also assuring reliable round the clock cheap and clean energy to everyone across the nation.

Have written about it in a lot of detail, you may want to read the above post.

Here are some of the charts for this sector:

Genus Power

HPL Power

Permanent Magnets

Moving on from smart meters.

Some new sectors showcasing strength this week are - oil marketing companies, lot of metals and mining related stocks, gold loan companies, small and mid sized banks (both public and private) and finally financial market related stocks like CDSL (chart below), 5 Paisa and Anand Rathi.

CDSL

5 Paisa

Large cap (particularly FMCG companies like Colgate also showcasing some strength).

Here are four of my favorite charts for the coming week:

NRB Bearings

Time Technoplast

Welspun Enterprises

Exide Industries

Finally, here is the chart for the best performer for this week - Swelect Energy Systems - this one beat the returns for even the smart metering guys - returning a 35.5% in last 5 days.

Swelect is one of the best solar cell and module producers in the world (in terms of efficiency) but their plant and scale of operations is very small (in few megawatts). The promoter who runs the company is also very old and there doesn’t seem to be a proper succession plan.

Its a likely target for a takeover esp. for the technology behind their solar cells. I am merely speculating at this point, there has been no news but the abnormal increase in volume over last week supports this hypothesis.

Here is the list of 448 technically strong stocks.

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Below are this week’s important insider trades.

Buying

1. Parag Milk Foods: Promoter continuing last week’s buying into this week

Selling

1. TD Power Systems: Promoters sold ~INR 835cr (22.5% stake) via block deal - here is a slightly old interview to watch

If there was a drought of announcements last week, this week was flooded with them. Here are this week’s important filings that you should pay attention to.

Mergers and Spin Offs

1. IDFC and IDFC First Bank Merger Details

2. Tata Steel and Tata Metaliks Merger Details

3. JSW Ispat and JSW Steel Merger Details

4. Reliance and Jio Demerger Details (this is a big one and sets ground work for eventual three way demerger of all of reliance’s big business verticals)

Preference Issues

1. A whole bunch of known names in Capacite Infraprojects

2. Smallcap world fund investment in Titagarh Wagons at 380/share (~25% lower than Friday’s closing)

Press Releases

1. APL Apollo Tubes indicating a strong quarter

2. MOIL indicating a strong quarter

3. NMDC’s best ever June Month and Q1 Performance

4. Its not just large banks, even smaller ones are loaded with money - CSB’s 30% YoY growth in term deposits

5. JTL’s record quarter (volume wise)

6. Adani Ports docks one of the longest ship in the world - an indicator of both how India’s ports are becoming deep water as well trade routes to India flourishing

7. PayTM walking the talk on business improvement

Buybacks

1. Amrutanjan Health

2. Goldiam International

3. James Warren Tea

Delistings

1. TTK Healthcare

Stock Split

1. IEL Limited

Capacity Expansions

1. Gulshan Poly new ethanol plant

2. Vishnu Chemicals new product facility commences production

3. Shree Pushkar Chemicals new facility commences production

4. Universal Cables 50% increase in capacity

Order Wins

1. Paras Defence 400 drones for Nano Fertilizer - Important theme playing out, read Ideaforge DRHP for more details

2. Genus Power order win for INR ~2207cr, HPL Electric and Tata Power won some too

3. Cosmic CRF (newly listed) wins orders from Titagarh Wagons

4. L&T order win of 2500cr

5. Olectra Greentech order win for ~INR 10,000cr worth of buses

6. Talbros Auto ~INR 205cr of EV related orders

Acquisitions

1. Siemens acquired a small electric vehicle parts company for INR 38cr

2. Syngene bought a facility of struggling competitor Stelis for INR 702cr

3. SJS bought a automotive interior company

4. Motherson Sumi acquiring three companies - here, here and here

Other Important Announcements

1. Tube Investments incorporating a new subsidiary to foray into commercial electric vehicles

2. Another Tube Investments subsidiary signs agreement with Anupam Rasayan for collaboration on pharma molecules for CDMO

3. Vedanta foraying into semi conductors and display glass

4. After many delays, Reliance finally launches a cheap 4G Phone

5. Biocon’s biosimilar products are finally gaining traction in regulated markets

6. Datamatics recognized in international market report for its product

7. Hero Motocorp launches its first Harley Davidson collaboration for Indian markets - Investors in Eicher motors hated it (🔻11% vs 🔼 8% for Hero)

8. Torrent Power starts pilot project for blending Hydrogen in city gas distribution network

9. ABB India’s new product for data centers

10. USFDA is hitting up Indian pharma factories for inspection - here, here and here

1. Essen Speciality Films - Home Furnishing Manufacturer

2. Greenchef Appliances - Kitchen Appliances Manufacturer

3. Magson Retail and Distribution - Grocery Retailer and Distributor

4. Pentagon Rubber - All types of conveyor belts for various industrial uses

5. Veefin Solutions - Digital Lender

6. HMA Agro Industries - Animal Meat Processor

7. Ideaforge Technology - Drones

Here is a good interview of Mr. Samit Vartak and a presentation by Nandan Nilekani on India’s digital transformation.

Goldman Sachs on India

Ken Griffin Interview

Alright. That was exactly five minutes. You’re done.
Feedback and criticism are always welcome.

In case you’re in a mood to read more, here is my write up on the business of PolicyBazaar.

The Business of PolicyBazaar

Go enjoy the rest of your weekend, see you next Sunday!

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Did you like today’s issue (or hated it?). Leave a comment and let me know!

Peace ✌️
Tar

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