Founder Stakes, Market Shakes
- 04th December 2024
Aaj Ka Bazaar
On Tuesday, the S&P 500 and Nasdaq eked out record closing highs, with tech-related shares extending recent gains as investors awaited further jobs data. Investors will also pay close attention to Friday’s U.S. monthly employment report. Asian stocks opened mixed today as investors reacted to the recent political turmoil in South Korea, where martial law was briefly declared and then lifted within hours. Further, Japan’s index is down as investors remained focused on the outlook for monetary policy, with speculation that the Bank of Japan may raise interest rates later this month. Considering the global market cues, the Indian benchmarks will likely have a steady start, extending a three-session winning streak, while focus will remain on the domestic central bank’s interest rate decision later in the week. On a stock-specific note, Reliance Power will be focused as the company has announced that Solar Energy Corporation of India Limited (SECI) has immediately withdrawn its debarment notice. As a result of this, Reliance Power and its subsidiaries, Reliance NU BESS Limited, are eligible to participate in all tenders issued by SECI.
Markets Around Us
BSE Sensex -80,922.37 (0.09%)
Nifty 50 – 24,479.25 (0.05%)
Bank Nifty – 52,739.30.95 (0.08%)
Dow Jones – 44,808.60 (0.23%)
Nasdaq – 19,480.32 (0.39%)
FTSE – 8,359.41 (0.56%)
Nikkei 225 – 39,211.96 (-0.10%)
Hang Seng – 19,780.69 (0.05%)
Sector: : Personal Care
Founder Boosts Stake, Stock soars 9%
Honasa Consumer, co-founded by Varun and Ghazal Alagh, saw its stock jump 9% after Varun increased his stake, bringing the couple’s total ownership to 35%—a rare move in India’s startup ecosystem where founders usually hold smaller stakes. Despite this positive news, the company is navigating challenges. Its stock has dropped over 38% year-to-date and recently reported its first quarterly loss in five quarters, with a ₹19 crore loss in Q2 FY25 compared to a ₹29 crore profit last year. Revenue also fell 7% year-on-year to ₹462 crore. While the stock has rebounded 25% in the past week from a sharp correction, concerns remain about slowing growth in the consumption sector. Analysts have downgraded the stock, citing weaker earnings and margins in the coming years. Traders and investors should weigh the recent rebound against ongoing challenges before making decisions.
Why it Matters:
Honasa Consumer’s rebound reflects renewed confidence due to increased founder stake, a rare move in startups. However, its financial struggles, including losses and revenue decline, highlight ongoing challenges in the consumption sector. Traders must assess if the recovery is sustainable amidst broader growth concerns.
NIFTY 50 GAINERS
BEL – 317.10 (1.60%)
HDFCLIFE – 642.65 (1.36%)
SBILIFE – 1457.35 (1.14%)
NIFTY 50 LOSERS
BHARTIARTL – 1608.00 (-0.77%)
SHRIRAMFIN – 3132.30 (-0.74%)
CIPLA – 1524.70 (-0.60%)
Sector: E-commerce
Swiggy rises with revenue, lower losses
Swiggy’s stock rose 3% to ₹517 after its Q2 FY25 results showed strong performance. Revenue jumped 30% year-on-year to ₹3,601.5 crore, growing from ₹3,222.2 crore in Q1 FY25, while net losses narrowed by 5% to ₹625.5 crore compared to last year, though slightly higher than the previous quarter. Monthly transacting users grew by 1 million, reaching 17.1 million, a 7% rise quarter-on-quarter and 19% year-on-year. Since its IPO at ₹390 last month, Swiggy’s stock has surged 33%, with its market cap crossing ₹1.16 lakh crore. The company is strengthening its competitive position in food delivery against Zomato and expanding its Instamart quick commerce segment with new dark stores. Swiggy raised ₹11,300 crore in its IPO, and its improved financials indicate potential for further growth, making it a stock to watch for traders and young investors alike.
Why it Matters:
Swiggy’s strong revenue growth and reduced losses signal improving financial health and competitiveness in the food delivery market. Its post-IPO stock surge highlights investor confidence in its growth potential. Expanding quick commerce capabilities positions it as a key player against rivals like Zomato.
Around the World
Asian markets dropped on Wednesday, led by a 2% slump in South Korea’s KOSPI after President Yoon Suk-Yeol declared and quickly revoked martial law, sparking political turmoil and investor concerns. South Korean lawmakers are now pushing for impeachment, deepening uncertainty. Japan’s Nikkei 225 and China’s CSI 300 also fell slightly, with China reporting weaker services sector growth as U.S. trade restrictions add pressure. However, Chinese chip stocks rose as the government encouraged local production over U.S. imports. Australia’s ASX 200 slid 0.5% after weak GDP data pointed to sluggish household spending and lower commodity exports, though it raised hopes of rate cuts. Thailand’s SET Index gained 1.3% on potential rate cuts to support its economy. While the Philippines saw minor losses, India’s Nifty 50 futures indicated a positive start. Political and economic instability across the region, combined with global monetary policy concerns, kept investors cautious.
Option Traders Corner
Max Pain
Nifty 50 – 24,400
Bank Nifty – 52,600
Nifty 50 – 24,406 (Pivot)
Support – 24,330, 24,204, 24,129
Resistance – 24,532, 24,607, 24,733
Bank Nifty – 52,564 (Pivot)
Support – 52,348, 52,000, 51,784
Resistance – 52,912, 53,128, 53,476
Did you know?
FPI buying resumes strong
Foreign Portfolio Investors (FPIs) made net purchases of ₹10,000 crore in Indian equities, breaking a 36-session selling streak. The shift came amid positive market sentiment following the BJP-led alliance’s win in Maharashtra. This marks renewed foreign interest in India’s stock market.
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