India Market Wrap 30 July 2023

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

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This week’s market action in one line

Earnings continue, markets resilient, large cap pharma returns with a revenge, nifty pharma index makes new all time high, M&A season grips the street

The Wrap #005

Market Breadth week ending 30th July 2023

Broader market action pretty much remained the same as flood of earnings continue. Stocks continue to make moves based on individual triggers rather than sectoral moves.

For the broader market breadth commentary you can read last week’s issue - nothing much has changed since.

Instead of repeating the same commentary from last week, I thought I would rather provide you insights into a sector that’s been the talk of town recently - The Pharma Sector.

India’s pharma sector isn’t one sector but rather a bunch of smaller sub sectors within the larger umbrella of pharma and healthcare. There are hospitals, diagnostic companies, domestic facing companies, export oriented generic companies, branded generic companies, CDMOs and CROs, medical devices, disposable medical equipment manufacturers and so on.

In simple terms - its a large complicated sector.

Each of these sub sectors have their own characteristics and do not necessarily tend to move in tandem. For example, in 2022, large cap pharma companies like Sun Pharma, Lupin, Dr Reddy’s didn’t do much in terms of price action, but at the same time pure play hospital companies like Narayana Hrudayalaya, Apollo Hospitals, Fortis etc. delivered resilient returns in otherwise tough market.

Here are the charts for reference.

Fortis

Apollo Hospitals

Narayana Hrudayalaya

Lupin

Dr Reddy's

Nifty Pharma index which is largely made up of large cap pharma, made its all time high time this week.

Nifty Pharma Index (Monthly Chart)

Constituents of Nifty Pharma Index and their performance over several time periods

The main reasons large cap pharma is talk of town these days and rightfully so for next couple of weeks is

1. In an otherwise expensive market, these are high free cash flow generating firms that are available for cheap/fair valuations. Dr. Reddy’s for example is close to all time low valuation multiples in its entire history!

2. These companies seems like a likely destination for increasing FII money entering the market, which is likely to mean revert the valuations to long term averages

3. There are several earnings triggers which should lead to high free cash flow and earnings growth

Here is a good short video to help understand this theme with data.

Below is a link to all 372 stocks in my watchlist for the upcoming week.

Here are this week’s important insider trades.

Buying

1. DB Realty: Promoters bought ~258.5cr (equivalent of 9.2% of market cap)

2. BCL Industries: Promoters bought ~31.5cr (equivalent of 2.88% of market cap)

3. Salzer Electronics: Promoters bought ~2.79cr (equivalent of 0.5% of market cap)

Selling

1. Inflame Appliances: Management sold ~2.34cr (equivalent of 0.5% of market cap)

Joint Ventures

1. Social Impact Technologies signs JV with SenecaGlobal to launch their products in new markets

2. ZF Steering new joint venture for foundry business

3. Reliance enters data center business in India via investments in a JV owned by Brookfield and Digital Realty

4. Zydus and Bayer

Capacity Expansion

1. Laxmi Organics commissions new plant

2. Power Grid commissions a 8.1 GW plant in Rajasthan

3. Raghav Productivity Enhancers begins commercial operations at new plant

4. BCL Industries commissions a 200 KL per day Ethanol plant

5. Dhampur Bio Organics to expand sugar crushing capacity by 3500 Tons per day and install a new distillery via greenfield expansion

6. Karur Vysya Bank inaugurates 4 new branches

7. Vesuvius to spend 87cr for building a new monolith refractory manufacturing plant

8. Lemon Tree new hotel in Punjab

9. Sona Comstar to expand Chennai EV traction motor capacity by 50% and add new capacity for PCB Assembly

10. Shree Digvijay Cement to expand capacity by 3 million tons for 250cr

11. Ultramarine Pigments new speciality chemical plant

12. Shyam Metallics to spend 3915cr to increase steel capacity by ~63%

13. NACL Industries to invest 1000cr in next 3 years to expand business in Specialty Materials and Intermediates

14. Shree Cement starts commercial production from its new clinker unit

15. Praveg opens a tent resort in Daman

16. PVR Inox launches new multiplex in Odisha

Mergers and Spin Offs

1. ITC to demerge its Hotel Business

2. Update on JSW Ispat Special Products merger with JSW Steel

3. Update on Rossell India demerger

4. Progress on demerger of Max Estates from Max Ventures

5. Progress on merger of ISML Ltd with Kirloskar Ferrous Industries

6. Mirza International to merge its real estate subsidiary into main business

7. Progress on Tata Steel and Tata Metaliks merger

Order Wins

1. ITCONS E Solutions agreement with Paytm to provide recruitment services

2. ITCONS E-Solutions new agreement to provide staffing services to Affine

3. SJVN new order for 7000cr

4. SJVN gets order for 5097MW of hydro projects in Arunachal Pradesh

5. MIC Electronics new order worth 3.56cr

6. RITES wins international order worth 500cr

7. Intellect Design Arena's new customer win in Saudi Arabia

8. Sealmatic wins order from Kirloskar Brothers

9. Welspun Speciality Solutions wins order worth 13.65cr

10. IRCON secures order worth 80cr

11. Dhabriya Polywood order from Airforce worth 8.25cr

12. Dhabriya Polywood another order from DLF for 28.68cr

13. L&T wins new order worth 2500cr for Neom City Project in Saudi Arabia

14. Transformers and Rectifiers India receives new orders worth 134cr

15. Kalpataru Projects receives orders worth 2261cr

16. Advait Infratech receives order for optical fiber worth 35.8cr

17. CFF Fluid Control receives order worth 25.46cr

18. Divgi Torq Transfer Systems receives order worth 180cr

19. Rail Vikas Nigam receives order worth 1088cr

20. Midhani receives order worth 178.54cr

21. Dhabriya Polywood receives order worth 7.87cr from DLF and 5.26cr from Godrej

22. PowerGrid emerges as successful bidder for a inter state transmission project

23. Welspun Specialty Solutions receives 10.84cr worth of orders

Acquisition and Open Offers

1. SJVN increases stake in Cross Border Power Transmission Company

2. Motherson acquires a German Interior Components company for EUR 118.3 Million

3. Deep Diamond acquires 33% stake in a motor vehicle renting and leasing company for 1.16cr

4. United Spirits completes acquisition in a alcohol beverage company

5. Open Offer for Blue Cloud Softech Solutions

6. Mahindra acquires a 3.53% stake in RBL Bank for 417cr

7. Marico acquires 58% stake in Satiya Nutraceuticals (owner of brand 'Plix') for 369.01cr

8. Welspun Enterprises acquires a water infra EPC company for 137.07cr

9. LG Balakrishnan and Bros acquires a company from insolvency

10. RHIM acquires another refractory and advanced monolithic product company

11. IPCA Labs receives approval from CCI to acquire Unichem Labs

12. Tata Communication acquires eSim Tech provider in Europe

USFDA

1. Aurobindo receives USFDA approval for its new injection

2. Completion of inspection at Aurobindo Plant

3. Lupin resolves USFDA warning letter observations for Goa and Pithampur plant

4. Zydus receives approval for its injection

5. USFDA inspects Gland Pharma facilities

Bonus Issue

1. 3rd Aug is record date for Nintec Systems bonus issue

Rights Issue

1. Tierra Agrotech Limited

2. Emerald Leisures

3. Piramal Pharma for 1050cr

4. Rajnish Wellness

Buyback

1. L&T

2. Tata Motors to buyback Tata Motors DVR Shares

3. Piramal Enterprises

4. CL Educate

5. Control Print

Fund Raising

1. RBL Bank to raise 3000cr

2. DMR Hydroengineering & Infra

3. Transwarranty Finance to raise 100cr

4. Vishnu Chemicals via private placement, floor price of 353.15/share

5. Shree Cements to raise 1000cr via NCDs

6. JK Lakshmi Cement to raise 2500cr

7. Shyam Metallics to raise 3600cr

8. Adani New Industries gets financing from Barclays and Deutsche Bank for USD 394M

9. JSW Steel to raise upto 7000cr

Exchange Migration

1. SRG Housing Finance to list shares on NSE

First Presentation or Concall

1. Vidli Restaurants

2. EcoRecycling first concall - audio and transcript

3. Cyient DLM

4. Senco Gold

Name Change

1. Lloyds Steel Industries to Lloyds Engineering Works

2. Adani Transmission to change name to Adani Energy Solutions

Other Important Announcements

1. Mahindra Group to help US companies set up manufacturing in India

2. CE Info Systems app MappIs becomes no 1 downloaded app on App Stores

3. Torrent Power launches EV Charging Stations

4. L&T to invest 506cr in Green Energy Subsidiary

5. Tube Investments incorporates a new subsidiary for Electric Vehicles

6. Triton Valves receives a patent for managing fire safety risk in electric vehicle battery packs

7. Faze Three incorporates subsidiary in US to sell home textile products

8. Food Corporation of India suspends supplies of rice for ethanol production - here and here

9. Airtel now connects 20 Million IoT devices over its business network

10. Greaves Cotton partners with Readily Mobility for after sales services of its vehicles

11. Shreeji Translogistics partners with Cathay Pacific Airlines

12. Forensic audit at Spicy Media and Thinkink Pictures

13. NIIT Learning Systems shares to list soon and invest EUR 3Million in a cleantech company

14. Govt of India to sell 3.4% stake in Rail Vikas Nigam

15. Lupin receives approval in Australia for its Inhaler

16. Natco Pharma files a new generic ANDA in US

17. Som Distilleries increases market share in Madhya Pradesh

18. Blackrock to partner with Reliance Jio Financial Services for Asset Management business in India

19. Indoco Remedies unit receives EU GMP certification

20. Orient Electric sells land worth 35cr

21. Ashiana Housing sells 33.08cr worth of senior living residences

22. Federal Bank's subsidiary files DRHP

23. LIC launches a new product

24. Court quashes SEBI's 25cr penalty on Reliance for Insider Trade

25. Malabar invests in Aurionpro via warrants issue

26. Rail Vikas Nigam sets up subsidiaries for manufacturing and maintenance of Vande Bharat trains

27. Shriram Finance wins case against ED Penalty of 5cr

28. Raymond launches a fourth project in Thane

29. Welspun Corp receives an income tax notice for 104.22cr

30. Fino Payments bank to apply for approvals to eventually transition to a small finance bank

1. Service Care: A staffing company

2. Asarfi Hospitals: A small hospital

3. Channel Nine Entertainment: A media production company

4. Netweb Technologies: A high performance computing company

1. The growing concerns around US Commercial Real Estate

2. A history of US Federal Reserve

3. Kenneth Andrade Interview

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Peace ✌️
Tar

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