Indian equity markets were trading flat amid volatility in the afternoon session after opening firm on Friday. While banks and financials, and realty stocks gained, IT and metal dragged. Sensex hit a high of 61,420 while Nifty touched 18,300 so far today. TVS Motor jumped over 7% post its September quarter earnings. RIL and Yes Bank are in focus as they announce results today
South Indian Bank down 8.5%; reports net loss of ₹187 cr in Q2
YES Securities recommends ‘sell’ on Syngene
Management commentary remains positive around demand environment particularly for clients based out of US & Europe though the company refrained from changing revenue guidance. Albeit, overstocking on RM that need to be expensed to have a toll on gross margin which we now cut by 300bps vs our previous estimate of 75%; coupled with Rs310mn in one‐time write down of export incentives, leads to a 24% cut to FY22 EPS. However, FY23/24 estimates remain largely unchanged. We expect costs to expand in H2 yoy on back of recent senior executives hiring as well as increase in travel costs. With revenue surprises unlikely in H2 and rebound in gross margin being dependent on resolution of supply chain (we factor in a near normal RM scenario with H2 gross margin of ~74%), reckon there exists little triggers in the near term to further rerating. While our preference for the franchise remains intact on back of medium term factors like start of Mangalore API, monetization of biologics capex (earlier than API), see little catalysts over next 6 months. Await a better entry point and retain SELL with largely unchanged TP of Rs520.
Nifty IT slips 1.6%; Mphasis dips 8%
Nykaa to launch IPO on 28 October
Nifty slips below 18,200; broad market weak; India VIX up 4%
Sensex at noon: Up around 150 points
Nifty Metal down 2.5%
Indian Hotels slips around 4%
The company plans to buy the 40% stake it doesn’t own in unit Roots Corp. Ltd, which runs the Ginger brand of economy hotels, for ₹500 crore. The IHCL board also approved plans to raise up to ₹2,000 crore by selling shares to existing investors and another ₹2,000 crore by selling shares to financial institutions, totalling ₹4,000 crore.
TVS Motors sees investor confidence improve with strong Q2 show, improved outlook
The highest ever revenue and Ebitda posted by TVS Motor Company ltd lifted investor confidence significantly. The stock gained more than 9% on the bourses in morning trades on Friday.
Investor confidence was subdued over the recent past looking at the weak demand for two-wheelers in the country. However, TVS benefited from strong exports, recording total two-wheeler sales of 8.70 Lakh units in the quarter as against 8.34 Lakh units in the second quarter of 2020-21. (Read more)
HDFC hits 52-week high
IEX up 3%; clocks 58% growth in electricity trade volume at 25.9 BU in Q2
Zee Entertainment Enterprises up 1%
The company agreed, after a nudge from the Bombay high court, on Thursday to consider Invesco’s demand to convene a special shareholders’ meeting after the court assured that the outcome would be kept on hold for a week during which it could review the legality of the resolutions recommended by the US fund manager.
BPCL board approves scheme of amalgamation of Bharat Oman Refineries with the company
Sharekhan maintains ‘Buy’ on Gateway Distriparks
We maintain a Buy on Gateway Distriparks Limited (GDL) with an unchanged SOTP-based PT of Rs. 347 as we factor in strong earnings growth led by its rail vertical.
– For Q2FY2022, GDL reported better-than-expected operational performance led by strong volume growth in both CFS and rail business along with maintaining operational profitability in rail.
-Management expects EXIM growth to remain robust while it would continue to strive to improve rail’s operational profitability further. The CFS business to focus more on margin accretive business rather than chasing volumes.
-Snowman is to expand capacities over next three years and focus on high margin warehousing business.
LIC Housing Finance down more than 6% as Q2 net profit down 69%
Arbitration panel rejects Future’s plea on Reliance deal in dispute with Amazon
A Singapore arbitration panel has rejected Future Retail’s plea to quash an order from last year that put its $3.4 billion deal with Reliance on hold, in a boost for its partner Amazon.com Inc which is seeking to block the transaction.
Amazon has been locked in a tussle https://www.reuters.com/technology/singapore-arbitration-panel-says-indias-future-retail-is-party-dispute-with-2021-10-20 with Future and accuses it of breaking contracts when it sold its retail assets to Indian market leader Reliance last year. Future denies any wrongdoing.
Nifty Realty soars 2.7%
PM Modi: There is optimism everywhere; experts, world agencies very positive about Indian economy
Rupee inches 5 paise higher at 74.82 against US dollar in early trade
PM Modi: World will now see India as more safe from Covid, its acceptance as pharma hub will grow further
Nifty Financial Services up 1.2%
BSE MidCap up 0.6%; TVS Motor jumps over 7%
CG Power up 4% as Q2 net profit jumps nearly 72%
Mphasis down 1%
The IT firm reported a 14% increase in consolidated net profit at ₹341.4 crore for the September quarter. The company’s net profit stood at ₹299.2 crore in the year-ago period. Revenue from operations grew 17.8% to ₹2,869.2 crore in the reported quarter.
Asian Paints’ strategy to go slow on price hikes is upsetting investors
Commodity cost inflation has hit market leader in decorative paints Asian Paints Ltd hard. Very hard. In the September quarter, its gross margins slumped 970 basis points (bps) on a year-on-year basis to 34.7%. One basis point is one hundredth of a percentage point. The company’s management said that raw material cost inflation was highest in four decades and it expects this trend to persist over the near-term.
Elevated marketing spends and increase in freight costs offset the benefit of operating leverage, pushing operating margins to a 50-quarter low of 12.7%. Ebitda margin contracted by 1090 basis points y-o-y, significantly missing analysts’ estimates of 18-20%. Ebitda is short for earnings before interest, tax, depreciation and amortization. (Read more)
TVS Motor up 7.4% on robust earnings
The company posted a 29.19% increase in consolidated net profit at ₹234.37 crore for the quarter ended September. Revenue from operations rose to ₹6,483.42 for the second quarter as compared to ₹5,254.36 in the year-ago period.
Broad market indices positive
Nifty above 18,250; HDFC, Titan lead
Sensex up 250 points; HDFC top gainer
Sensex, Nifty open in the green
Sensex players at pre-open
Sensex swings between losses and gains at pre-open
Indices in the red at pre-open
Petrol, diesel prices hiked
Petrol and diesel prices on Friday were hiked by 35 paise per litre each, the third consecutive day of increase that took pump rates across the country to record high levels.
The price of petrol in Delhi rose to its highest-ever level of ₹106.89 a litre and ₹112.78 per litre in Mumbai.
In Mumbai, diesel now comes for ₹103.63 a litre; while in Delhi, it costs ₹95.62 per litre.
In Kolkata, the petrol will be sold at Rs. 107.44 per litre and diesel will be sold at Rs. 98.73 per litre. The prices in Chennai on Friday, stands at Rs. 103.92 per litre for petrol and Rs. 99.92 per litre for diesel.
Indian indices may open in the green amid volatility
Indian stock markets are expected to remain volatile on Friday, while trends in SGX Nifty indicate a tepid opening for domestic benchmark indices.
On Thursday, the BSE Sensex ended at 60,923.50, down 336.46 points or 0.55% and the Nifty was at 18,178.10, down 88.50 points or 0.48%.
₹9,489 cr festive cheer for govt workers
The central government on Thursday decided to raise the dearness allowance (DA) to employees and the dearness relief (DR) to pensioners by 3% to 31% from July to cushion them from the rise in cost of living.
The decision by the Union cabinet will cost the exchequer ₹9,488.7 crore a year, Union minister Anurag Singh Thakur said. It will benefit more than 4.7 million central government employees and 6.8 million pensioners, Thakur added. ( Read more)
Oil prices resumed their climb on Friday on continued tightness in U.S. supply, but were headed for a flat finish on the week as coal and gas prices eased, curbing fuel-switching which had stoked demand for oil products for power.
U.S. West Texas Intermediate (WTI) crude futures rose 20 cents, or 0.2%, to $82.70 a barrel.
Brent crude futures climbed 24 cents, or 0.3%, to $84.85 a barrel.
China’s Evergrande avoids default with last-minute payment: Report
China’s Evergrande Group pulled back from the brink of default by reportedly paying a bond coupon before this weekend’s deadline, the latest twist in a months-long drama that has captivated global investors.
The company wired the $83.5 million payment and bondholders will receive the funds before Saturday, state-backed newspaper Securities Times said, citing “relevant channels”.
PM Modi to address nation at 10 am today
Prime Minister Narendra Modi will address the nation at 10 am on Friday. This comes in the backdrop of India administering more than one billion jabs to protect against the coronavirus.
“PM @narendramodi will address the nation at 10 AM today,” the Prime Minister’s Office said in a tweet on Friday morning.
Stocks to Watch: Reliance, Zee, Bharti Airtel, JSW Steel, TVS Motors
Markets will also eye stocks of prominent companies that will announce earnings today, including Reliance Industries, Tata Elxsi and Yes Bank ABB Power, Aditya Birla Fashion, Crompton Greaves Consumer, Deepak Fertilizers, Federal Bank, Gland Pharma, HDFC Life Insurance, Hindustan Zinc, Inox Leisure, PVR
Asian stocks mixed
Asian stocks were mixed on Friday as traders weighed earnings reports, worries about inflation, and a report indicating that indebted developer China Evergrande Group may meet a key payment deadline
S&P 500 futures fell 0.1%. Nikkei 225 index was down 0.36%. Australia’s S&P/ASX 200 index was flat South Korea’s Kospi index was steady.
US markets mixed
US stock indexes were mixed on Thursday. The Dow Jones Industrial Average fell 6.26 points, or 0.02%, to 35,603.08, the S&P 500 gained 13.59 points, or 0.30%, to 4,549.78 and the Nasdaq Composite added 94.02 points, or 0.62%, to 15,215.70.
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