"The stock market is never obvious. It is designed to fool most of the people, most of the time." - Jesse Livermore
The spike in crude prices has so far not affected sentiment for both listed aviation stocks Interglobe Aviation and Spicejet. Part of the reason for that is passenger traffic growth has been steady and air fares have gone up. But the equation could as quickly change near term.
According to Centrum, ticket prices have risen 8-10 percent. Should the war in the Middle East prolong, it could further push up crude prices, and ticket prices could rise as high as 25 percent over the next year.
Factors driving high air fares are the issues at Vistara, Pratt & Whitney engine issues and increased travel because of the upcoming elections. Centrum feels a capacity crunch is stoking the rise in airfares and that as the capacity normalises, air fares will start coming off.
Mahindra Logistics (Rs 466, + 3.5%)
The company reported a net loss for the fifth quarter in a row.
Bull argument: the company has guided for an operating breakeven in its key Express delivery segment in the second quarter of the current financial year. Loss in this segment narrowed in the March quarter and revenues grew 26 percent.
Bear argument: The company has missed previous breakeven deadlines. Nuvama expects demand to stay muted given the upcoming general elections in H1FY25, which could then delay the breakeven further.
HUL (Rs 2260, flat)
The company announced its Q4FY24 earnings.
Bull argument: The company is looking to ramp up investments in six key areas including suncare, face-cleansing, and weather-proof body care, among others. These segments are seeing major tailwinds, says the management. Expectations of a good monsoon augurs well for rural recovery.
Bear argument: Mass categories, especially skincare, are under pressure. Market outlook on the FMCG sector in general is cautious.
Nippon Life India (Rs 584, +3.79%)
The company reported robust Q4 results.
Bull argument: Company’s market share in equity segment, total AUM and SIP have increased. Management said the small cap fund continues to attract flows despite restriction on SIP size.
Bear argument: Employee costs increased sharply by 24.6 percent YoY which might weigh on expenses. Market share in exchange traded funds have also increased, which will result in lower fees.
Cyient DLM (Rs 722.50, +5.24%)
Stock jumped on the back of strong Q4 earnings driven by increased ordering in the defence, med-tech and aerospace verticals.
Bull argument: According to analysts at InCred Equities, an increase in exports will be a trigger for margin expansion. Analysts see the company sustaining its growth on the back of customer stickiness.
Bear argument: While the company has seen gains this quarter due to order wins, a slowdown in these orders and manufacturing challenges due to geopolitical conflicts could be a challenge.
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