United Spirits Expands Horizons

Aaj Ka Bazaar

The US market struggled for direction before eventually ending modestly lower overnight as investors assessed mixed earnings reports and monitored the fast-changing presidential contest. Investors may also have been reluctant to make significant moves ahead of releasing key earnings and economic news in the coming days. Asian markets were quiet on Wednesday following underwhelming earnings reports from major US technology giants Tesla and Alphabet, which dampened investor confidence. Meanwhile, the Japanese yen reached its highest level in six weeks as anticipation built ahead of an upcoming central bank meeting where the possibility of a rate hike remains uncertain. Indian market may open on a subdued note Wednesday after the 2024 budget introduced significant shifts in capital gains tax that could affect investment decisions. Earnings will continue to remain in focus, with Axis Bank, Bajaj FinServ and Larsen & Toubro due to report their quarterly results today.

Markets Around Us?

BSE Sensex - 80,257.77 (-0.21%)

Nifty 50 - 24,439.60 (-0.16%)

Bank Nifty - 51,592.20 (-0.15%)

Dow Jones - 40,232.23 (-0.32%)

Nasdaq - 17,997.35 (-0.06%)

FTSE - 8,167.37 (-0.38%)

Nikkei 225 - 39,186.57 (-1.04%)

Hang Seng - 17,361.12 (-0.62%)

Sector: NBFC

Bajaj Finance posts mixed bag numbers for Q1FY25

Bajaj Finance's Q1FY25 results were a mixed bag, falling short of street expectations. The rising cost of funds remains a concern, yet the lender managed to book 10.97 million new loans and add 4.47 million new customers, primarily due to the RBI lifting restrictions on “eCom” and “Insta EMI Card” loans. With its vast experience in the lending business, Bajaj Finance has demonstrated long-term profitability. While asset quality remains stable, elevated losses in the rural B2C segment suggest the need for caution. We remain positive that the NBFC will manage to reduce slippages and enhance its asset quality moving forward. The elevated interest rate environment poses a significant challenge, with intense competition from banks and other NBFCs. It will be interesting to see how Bajaj Finance navigates these challenges once interest rates normalize.?

Why it Matters:

Looking ahead, the festive season should drive healthy growth. The company's first-mover advantage in digital lending and its history of flawless execution are key strengths that will be hard for competitors to replicate.

NIFTY 50 GAINERS

TATAMOTORS - 1,031.50?(2.96%)

HDFCLIFE - 662.25?(2.84%)

ONGC - 322.90?(2.79%)

NIFTY 50 LOSERS

TATACONSUM - 1,224.80?(-2.55%)

BAJFINANCE - 6,558.00?(-2.51%)

NESTLEIND - 2,532.30?(-1.91%)

Sector: Beverages

United Spirits invests in non-alcoholic brand

United Spirits has invested in two companies: V9 Beverages, which makes India’s first distilled non-alcoholic spirits, and Indie Brews and Spirits, known for its cold brew coffee liqueur. They acquired a 15% stake in V9 Beverages and a 25% stake in Indie Brews and Spirits. These investments align with their strategy to tap into emerging trends in non-alcoholic drinks and coffee liqueurs. The non-alcoholic beverage market is growing rapidly, driven by health-conscious consumers and regulatory pressures. Gen Z, in particular, is showing interest in healthier and non-alcoholic alternatives, boosting the popularity of innovative beverages like these.

Why it Matters:

By acquiring stakes in companies offering innovative products like distilled non-alcoholic spirits and cold brew coffee liqueur, United Spirits is positioning itself to capitalize on these emerging trends. This diversification could potentially enhance the company's market reach and revenue streams, making it a positive development for investors looking for long-term growth opportunities.

Around the World

Most Asian stocks fell on Wednesday, driven by losses in the technology sector after disappointing earnings from U.S. giants Tesla and Alphabet. This led to extended selling in tech stocks across the region. Japan’s Nikkei 225 and South Korea’s KOSPI dropped, while Hong Kong's Hang Seng index fell sharply due to declines in electric vehicle stocks. Chinese markets also hit a two-week low due to weak economic data and limited stimulus from the central bank. Broader Asian markets showed mixed results, with Australia's ASX 200 and Japan's TOPIX index falling slightly. India’s Nifty 50 futures also dipped amid concerns over increased capital gains taxes in the new budget. Overall, sentiment remained cautious due to these factors.

Option Traders Corner

Max Pain

Nifty 50 - 24,450

Bank Nifty - 51,400

Nifty 50 - 24,378 (Pivot)

Support - 24,174, 23,870, 23,666

Resistance - 24,683, 24,886, 25,191

Bank Nifty - 51,889 (Pivot)

Support - 51,231, 50,684, 50,026

Resistance - 52,436, 53,094, 53,641

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