Hello Espresso lovers! We are late by a day! But as they say, Der aaye, durust aaye. (Better late than never). Before we begin, our biggest and heartiest congratulations and salute to Skyroot and its team for what they pulled off on Saturday morning! The launch of Vikram-1 from Sriharikota made India only the third country after the US and China to independently place payloads into orbit using a launch vehicle that was developed privately! When they say choose your heroes wisely, here’s an example! Oh, and we did manage to speak to them too! Here’s the complete interview!
Now we come to Super Saturday! Trust us, it was a longggg, almost never ending one. The street hoped for stronger results looking at the business updates but were left with Thoda hai, Thoda ki Zaroorat hai! When stocks go up in anticipation of good results, just meeting estimates is never enough. A comprehensive wrap of all the banking results, right here! A special shoutout to our friends Ritu Singh and Annanya Singh as well for being relentless through the day, jumping from one earnings call to another, sending out information for us to process and write as well! They were super on Super Saturday!
Of course, there are standouts in every instance. The man of the match on Saturday, was ICICI Bank. Numbers beat estimates comfortably, asset quality was strong too, and while most of its peers faced margin pressure, their margins were stable and the management also expects them to remain in this range going forward. May not expand, but will not contract sharply either! Would not be a surprise if that becomes the stock of Monday morning.
Another one that stood tall beyond banks, was Reliance Industries! ₹3 lakh crore revenue in a single quarter. Only nine Indian companies have managed to deliver annual revenue of this and more. Our friend Yoosef manages to dig out these nuggets out of nowhere almost every other week! Read more about this here!
The great Chanakya once said, “Karz, Aag aur Shatru ko kabhi chota nahi samajhna chaiye. Mauka milte hi yeh bahot bada nuksaan kar sakti hai” (Never underestimate debt, fire and enemies. They can cause great damage the moment they get a chance). Plenty of South Koreans understood at least the Karz (Debt) aspect of this saying last week.
Reports say over 1.2 million leveraged retail accounts received margin calls in Korea last week and over 3.6 lakh accounts were fully liquidated by the brokers! That is one in every 30 working adults there! For a market that has been pushed to stratosphere by just two stocks and plenty of leverage, the fall has been equally sharp. The KOSPI is now down nearly 30% from its peak and since the end of May, has only delivered a positive weekly return ONCE! Sir Isaac Newton is smiling, possibly munching on an Apple that fell on his head. Many in South Korea would also be wondering, Samsung aur SK Hynix ke badle Apple hi gir jaata ????
Back home, two sectors are grabbing the spotlight. One of course, HAS to be IT. But this time, its different! The Nifty IT index was up 4.5% last week, the joint best of the year so far. Yes yes, we can all see the Kya! Kya! Kya! and multiple camera pans taking place on reading that, but yes, it did happen. Anti-AI trade anyone? Who led this rally last week? The Purana Chawal, TCS! I guess someone said “Tera khoon kab khaulega re, TCS!?
” (When will your blood boil, TCS?) The stock was up 9.5% last week, the most this year in a single week, after seven straight weeks of losses, and only the seventh weekly gain this year out of 28 so far!
But is this the start of the return of IT? Not really. Barring Tech Mahindra, the results and commentary from companies so far have only been disappointing. Infosys reports results this week and a lot of the Midcap IT bigwigs are yet to report as well. HSBC, while upgrading India back to neutral, said that IT will continue to remain out of favour for the time being. But some domestic fund managers do not seem to agree. We’ll tell you about that too!
The other one is Real Estate. After surging 22% in five weeks, the index saw some profit booking last week, but the analyst community is starting to warm up to it after the sell-off seen at the start of the year. The recovery has meant that the Nifty Realty has also turned positive for the year, with Oberoi Realty, Phoenix Mills and Lodha already having gained over 10% each.
Sanjay Parekh of Sohum Asset Managers has increased his weightage on IT names like Coforge and Infosys. He also likes Real Estate with his exposure in DLF and a fresh investment in Lodha. has invested in Vedanta Aluminium, Vedanta, Bharti Airtel and Reliance Industries to capitalize on the war risk. He also sees a healthy listing gain for SBI Funds Management.
Gautam Shah believes that the best is yet to come for the broader markets! He sees the small and microcaps going up another 20%, believes the worst is over for Indian IT, and has a 32,000 target for the Nifty IT index. But instead of investing in Indian largecaps, he prefers looking at gold and silver as investment options.
Amidst all of this, an arch nemesis is rearing its ugly head yet again. Brent crude closed at $88 a barrel last week. WTI is back above $80 as well. The situation in West Asia does not appear promising with attacks across Kuwait, Bahrain and Jordan. If crude continues to edge higher, that does not bode well for our markets, something that HSBC also highlighted in its note while upgrading India earlier in the week.
This has been an exhausting week and the next one promises to be equally exhausting if not more. Almost 150 companies, including Infosys, Bajaj Auto, Paytm, Meesho, Dr. Reddy’s, Tata Consumer, SRF, report numbers next week. The test of big tech and chip stocks also begins next week with Alphabet, Intel, IBM reporting numbers. And then of course, West Asia and crude are always lurking around.
I can already see my father standing in a corner and saying, “Waise to mere saare kaam Cherry sambhalta hai, but he is working on a Sunday also!” Not the precedent you want to set. So we take your leave for this week, with a promise to be back next Saturday with all the latest brew. Until then, do like, comment, share, subscribe to Markets Espresso and follow us on our social media handles. Have a happy Sunday. Ciao!
