“One of the important factors behind the fluctuation between bull and bear markets, between booms and crashes and bubbles, is that investor memory has to fail us – and fail universally – in order for the extremes to be reached.” - Howard Marks
The focus now shifts to the RBI credit policy. Hardly any excitement among market participants, as they have made peace with the fact that the central bank is unlikely to cut rates before the US Fed does. So what can one expect?
Emkay Global’s Lead Economist Madhavi Vora offers some clues: “We see the RBI striking a dovish tone in the policy, post a healthy budget and largely comfortable global narrative, but it will fall short of any stance change (a close call). No material change in the assessment of macro variables is expected.”
BSE (Rs 2,470.40, -3.5%)
The exchange doubled its profit in the December quarter, yet the number was lower than Street estimates. Bottomline missed estimate because of higher contribution to settlement guarantee fund (SGF)
Bull case: Star MF platform continues to gain traction. Weekly options contracts in Sensex and Bankex continue to see a good response.
Bear case: NSE, whenever it lists, could steal the limelight from BSE. The stock has rallied 400 percent in the past one year and could remain subdued due to profit-booking. Incremental regulations can also spoil the F&O party
Varun Beverages (Rs 1346, +3.3%)
The company's third-quarter revenues grew 21 percent year-on-year.
Bull case: New products like Sting, Gatorade, and dairy products find higher
acceptance among consumers. The company is deepening the distributor reach, annually expanding to 400-500 thousand outlets and adding more chilling equipment.
Bear case: Competition is heating up in the market. Gross debt has increased to Rs 47 billion in December 2023 as against Rs 34 billion a year back. The stock has more than doubled over the last year and could consolidate in the near term.
Nykaa (Rs 160.5, -0.56%)
The beauty and personal care company’s net profits for the December quarter more than doubled to Rs 17.5 crore.
Bull case: Revenue and net profit has been growing steadily for the last three quarters in a row.
Bear case: Intense competition in the segment makes runaway growth difficult. The numbers need to be much higher to justify expensive valuations.
PB Fintech (Rs 905.4, -6.15%)
The stock crashed following a Moneycontrol report that the income tax department may soon begin assessment proceedings against the company.
Bull case: PaisaBazaar's collaboration on co-created products with lending partners is yielding results. The company is looking to enter the reinsurance brokerage, account aggregator and payment aggregator businesses.
Bear case: The online insurance aggregator has been under the scanner for regulatory lapses and KYC non-compliance. Growth in lending disbursals has slowed down owing to RBI guidelines on unsecured credit. Nuvama recently downgraded the stock to ‘reduce’ citing rich valuations.
Bharti Airtel (Rs 1,153.9, + 2%)
The company’s third quarter net profit rose over 54 percent year-on-year.
Bull case: Strong business growth both in India and Africa, revenue and EBITDA growth met analyst estimates. Net debt has declined.
Bear case: While the company may be one of the two strong players in what is almost a duopoly sector, the telecom story is well known. Rapid growth rates of the past is unlikely.
With inputs from Shailaja, Ananthu, Anishaa, Yash and Srushti
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