MarketBuzz
1253: Marketbuzz Podcast With Hormaz Fatakia: Dixon Tech, Vodafone Idea, HPL Electric in focus
Good morning and welcome to CNBC TV18's Market Bus Podcast. I am Harms Fatakya. We are coming to the fair end of the earnings season and hence the results are being reported thick and fast and plenty of them were reported after market hours yesterday as well. Let's go through some of them. I will start off with Dixon Technologies where the numbers were a miss on street expectations. A bit of margins for the quarter fell by 110 basis points to 4% and that is because the share of the low margin mobile and EMS division increased to 66% from 46% earlier and that is what hurt the margins for the company. The profit was also a miss due to a weak demand for TVs, washing machines and lighting components. The management and earnings call said that the consolidation of the mobile and the EMS business will begin from the second quarter of FY 25 and that they are in the final stages of adding one more large global brand as their client in the coming months. The stock mind you has almost tripled in the last 12 months. Jeffries as a result has maintained its underperform rating citing expensive valuations but CLSA expects the stock to touch 9,000 rupees a share. Burcha paints also reported results yesterday and similar to how Asian paints earlier spoke about down trading during the quarter which is a shift to lower value products. Burcha paints also highlighted that lower value products saw higher growth during the quarter. One of subsidy in the base quarter expenses of a plant coming on stream and higher advertising spends also impacted the EBITDA performance for Burcha paints. The management though remains optimistic and they continue to expect double digit volume growth for the first quarter and for FY 25 for the decorative business and that the normal monsoons may also propel rural demand going forward. While raw material prices have remained benign in recent times, the management said that this remains an uncertainty and that is a concern because of the current geopolitical situations. It was a good quote of a mankind pharma with revenue meeting estimates growing 19% from last year while margins expanded by 400 basis points to surpass expectations. The company also crossed the revenue milestone of 10,000 crore rupees. The board has also approved raising 7,500 crores via a QIP and various other methods. Remember mankind pharma's IPO last year was a pure offer for sale which means that the company did not receive any proceeds from the IPO. HP Electric in its post earnings presentation said that its order book as of the 9th of May stood at well over 2000 crore rupees. Metering systems and services business contributed to 88% of that total order book. The company further said that metering tenders worth 10,000 crore rupees have either been floated or are expected to be floated in the near term. As far as results go, HP Electric's profit went up by 22% while margins expanded by 70 basis points. The stock has already gained 50% so far in 2024 and a whopping 330% in the last 12 months. Paradim phosphates profits doubled from last year, revenue also increased by nearly 40%. The company achieved volume growth of 13% but the key point here is that they have managed to reduce their debt by 14% from last year. Stocks like IEX, Precall, NLC, India, NCC and many other broader market names like Teetagad also will be reacting to their results today. MINDRA and MINDRA is among the final few nifty companies that will report results today. Broad market names like Biocorn, Vodafone Idea, Info Edge, Crompton Consumer, JK Paper, Hindustan Aeronautics, Solar Industries, Mothers and Sumi wiring and a whole host of such names will also be reporting results today. Onto the markets then and the setup remains pretty much the same I guess for the NFT as it barely moved on Wednesday but some positives to take even as the index ended lower yesterday is the fact that the NFT is making higher highs and higher lows on the charts meaning Wednesday is high and low were higher than Tuesday's and so on. The other positive is that the broader markets continue to do well even as the NFT struggles are that 50 DMA level of 20-300, the mid-cap index gain for the 4th day in a row while PSU banks added another percent to its tally on Wednesday. The weeks staying flat for the 2nd day in a row may also give the bulls some bit of comfort but they would want the NFT to break out from that 20-150 to 22,300 range on the higher side today which is the weekly options expiry as well for the NFT contracts. The NFT bank though turned out to be an underperformer on its weekly expiry shaving off nearly 200 points after a 2 day recovery. The index though continues to trade near levels of 47-700 and it still needs another 550 points to recover its losses and turn positive for 2024 once again. It is another positive handover from Wall Street as all 3 benchmark indices hit a record high overnight after better than exploited inflation data. Now that data has boosted hopes of a fed rate cut sooner than later. According to the CME FedWatch tool, the US central bank now has a 75.3% likelihood to cut interest rates in September up from the 65.1% chance on Tuesday. Asian markets have also opened higher carrying on from where Wall Street left off. The give NFT as we speak is indicating a gap upstart for our own markets as well. That's all for today. We all hope you have a wonderful and profitable expiry session for the sharpest market insights. Stay tuned for CNVCTV18 and CNVCTV18.com. [Music]