PremiumIndian share indices ended flat on Friday after recovering from their day's low in a choppy session. Asian stocks closed weak on Friday, while European shares dropped after a raft of Federal Reserve officials signaled they will combat inflation aggressively. Shares of HCL Tech and HDFC Bank were in focus ahead of their earnings
Key share indices ended marginally lower on Friday amid volatility and tracking global markets. Sensex ended a mere 12 points lower at 61,223, while Nifty settled flat at 18,255. TCS and Infosys were the top gainers, while Axis Bank and Asian Paints were the main laggards. IT and realty stocks outperformed while banks, FMCG and pharma were under pressure. Smallcap indices bucked the trend to end higher. On the 30-share Sensex, 13 stocks advanced and 17 declined.
Tata Consultancy Services promoters - Tata Sons and Tata Investment Corporation Ltd (TICL) - intend to participate in the IT services major's ₹18,000 crore buyback offer by tendering shares worth about ₹12,993.2 crore.
On Wednesday, the TCS board approved an up to ₹18,000 crore buyback offer entailing 4 crore shares at ₹4,500 apiece. According to a postal ballot notice by the company, Tata Sons and TICL intend to participate in the buyback offer. (PTI)
The market is showing a typical behavior which generally happens after a decent rally and if any major event is close by. Both these conditions meet here as we have seen a spectacular recovery of more than 1800 points in such a short span after making a low around 16400. And we are now approaching the mega event Budget, so we are seeing this range bound activity in the benchmark index. For the coming session, the next level to watch out for remains at 18350 and once its surpassed, there is no major level visible before 18600. As of now, we do not expect a runaway move in the forthcoming session and hence, traders are advised to keep focusing on individual stocks. Because we can clearly see some sector churning happening. Yesterday banking was sulking throughout the session and IT remained quiet. But Metals stocks had a fabulous comeback as they kept soaring throughout the session.
One needs to keep concentrating on such potential movers in order to fetch decent gains. As far as supports are concerned, 18200 followed by 18100 should be considered as intraday levels and the base remains at 18000.
In an eventful year for the domestic mutual fund industry, assets under management (AUM) of fund houses, excluding domestic fund of funds (FoF), surged in 2021 to close at a record ₹37.73 trillion, according to a report by global analytics company, Crisil Ltd.
The industry added ₹6.70 trillion, a record absolute asset gain for any calendar year on record. As per Crisil, the previous peak was ₹4.80 trillion in 2017, followed by ₹4.5 trillion in 2020. In percentage terms, the industry gained 22% in 2021 compared with 17% in 2020. (Read here)
Sajjan Jindal-led JSW Group's port development arm on Friday announced a $ 400 million fundraise through a bond issue from international investors.
The money raised in the issue by JSW Infrastructure will be used to repay the existing debt of the company and its subsidiaries.
The issue of the sustainability linked bond (SLB) is its debut issue in international bond markets, and the company could manage final pricing, which was lower than the guidance, as per an official statement.(PTI)
India's exports, merchandise and services combined, soared to $57.87 billion in December, 25.05% higher over the same period of last year, government data showed on Friday. Imports rose to $72.35 billion in December, 33.86% higher over the same period of last year.
Asian markets settled lower on Friday as a string of top Federal Reserve officials pressed their cases for fighting inflation, raising concerns the bank will embark on an aggressive campaign that could see four interest rate hikes this year. European markets also opened with losses. Tokyo's Nikkei 225 closed 1.3% lower; Hong Kong's Hang Seng Index fell 0.2%; Shanghai's Composite was down 1.0%.
In Europe, London's FTSE 100 opened 0.4% lower
Indian start-up EVage, which is building electric delivery vans for e-commerce and logistics companies including Amazon.com Inc, has raised $28 million from U.S.-based venture capital firm RedBlue Capital,
ICICI Prudential Asset Management Company has entered into a collaboration with the US-based First Trust Advisors, which is into actively-managed exchange-traded funds, to launch a slew of global fund of funds.
Financial Performance: Mindtree beat our estimates with revenue of ₹2,750 Cr for Q3FY22, reporting revenue growth of 35.9% YoY and 6.3% QoQ. The company posted operating profits of ₹592 Cr, registering a growth of 9.7% QoQ. Furthermore, its Operating Margins expanded by 100bps QoQ to 21.5%, mainly driven by the company’s superior execution and better service mix. Net profit for Q3FY22 stood at ₹438 Cr, registering an impressive growth of 34% YoY and 9.7% QoQ.
Operating Performance: On the vertical front, the BFSI vertical grew by 4.2% QoQ and Retail Manufacturing and CPG grew by 0.1% QoQ. Travel & Hospitality reported growth of 7.4% QoQ while the majority of the remaining verticals witnessed a strong recovery during the quarter.
Outlook & Valuation: We believe Mindtree enjoys a resilient business structure and has a proven track record of strong and efficient execution capabilities. With depreciation in INR, lower travel cost, and lower on-site expenses, EBITDA margins are likely to expand in the near term. We recommend a BUY on the stock and assign 40x P/E multiple to its FY24E earnings of ₹131.5/share to arrive at a, implying an upside potential of 12% from CMP.
We expect Pharma Universe could report high single digit growth (4.0% YoY), majorly driven by Injectables and Generic segment. India Pharma Market (IPM) grew by 5.8% that is driven by a volume bounce back and recovery in sales of non Covid-19 products. In the US, the generic market continues to be challenging, with mid-single-digit to low-double-digit price erosion across companies, owing to excess supplies in the market and limited one-time/off-contract sales currently.
In overall, earnings for the Pharma Universe would moderate and come in flat YoY, after six quarters of healthy performance. Increased competitive pressure on the US base business – coupled with the reduced pace of launches and lower COVID-related off-take – is expected to drag down the overall sector performance in 3QFY22.
Pharma Sector update: US market - The recent commentary from global generic players indicates that the US generic market continues to be challenging, with mid-single-digit to low-double-digit price erosion across companies, owing to excess supplies in the market and limited one-time/off-contract sales currently.
It is expected that the next round of key US product launches for Indian generic companies is expected only in 2HFY22E that could improve sales going forward in 2HFY22E.
We believe the narrative for the US-focussed generic companies would remain weak over the next 2-3 quarters, especially given the backdrop of input cost pressures and gradually-increasing intensity of facility inspections by the USFDA.
Gland Pharma & Dr. Reddy are expected to do well in the US market due to speciality product portfolio and strong products pipeline.
Domestic Market - The domestic Indian Pharma Market (IPM) market reported a growth of 8% in the last quarter which has recovered from the impact of Covid-19. We expect this growth could continue in upcoming quarters too. The segments like Gastro Intestinal, Respiratory, Pain, and Hormones have outpaced the industry growth.
Abbott India, KIMS, and HCG are expected to do well in the domestic market.
Covid-19 impact: Gland Pharma, Dr. Reddy (DRRD), and Cadila could benefit with the increase in Covid-19 cases (Omicron impact). DRRD and Cadila have tied up with foreign players to launch their products in the domestic market like Sputnik V, Remdesivir and Molnupiravir, etc. Gland Pharma has a dedicated manufacturing facility to increase the production of Covid-19 drugs. This could increase the revenue of the above companies on a temporary basis.
Q3FY21 Performance: We expect EBITDA in 3QFY22 should be sequentially lower for the majority of Indian generic pharma companies. The factors behind it, lower gross margins due to increase in raw material costs; sustained price erosion in the US at approximate 10% YoY during the quarter. Sales growth trend in India is expected to be single high digits for most firms in the last quarter.
Top Picks: Gland Pharma, KIMS, HCG.
The World Health Organization (WHO) Guideline Development Group recommended the use of two arthritis drugs called baricitinib and interleukin-6 (IL-6) in combination with corticosteroids to treat patients with severe or critical covid-19.
The Union Budget will be presented on 1 February. The first part of the session would conclude on 11 February.
CESC Ltd reported stable performance for the quarter ended December (Q3). Key subsidiaries Dhariwal Infrastructure Pvt Ltd and Haldia Energy Ltd recorded good business. Profit at Dhariwal Infrastructure jumped to ₹50 crore, rising 79% year-on-year, while Haldi Energy reported a bottomline of ₹83 crore.
At standalone level, too, performance was decent, even as unit sales for electricity failed to show significant improvement. Unit sales rose a marginal 0.7% year-on-year during the quarter. For the first nine months, unit sales were up 9%, as per analysts. (Full story)
Private equity investor Actis is in advanced talks to buy six road assets of the company for an enterprise value of ₹8,000 crore- ₹10,000 crore. The BK Goenka-led infrastructure and energy firm’s road assets, which are up for sale, include five hybrid annuity model (HAM) roads and one build-operate-transfer (BOT) project.
The names of YES Mutual Fund schemes have been changed to WhiteOak Capital schemes as YES AMC is now a WhiteOak group company.
The White Oak Capital group provides investment management and advisory services for Indian equity investors.
YES MF has three schemes – YES Overnight Fund, YES Liquid Fund and YES Ultra Short-term Fund.
Indian oil refiner Hindustan Petroleum Corp. is cautiously optimistic that the nation’s recovery from the pandemic will remain largely intact, despite a recent spike in coronavirus cases.
Infections have surged and fewer vehicles are traversing the streets of India’s capital, but authorities have so far refrained from instituting a nationwide lockdown, opting for targeted restrictions such as closing bars. While people are avoiding unnecessary travel, there hasn’t been a substantial impact to demand, according to Hindustan Petroleum Chairman Mukesh Kumar Surana. (Bloomberg)
The Nifty started Thursday’s session on a positive note and oscillated in merely 85 points range throughout the session. As a result, daily price action formed a small bull candle with small lower shadow, indicating continuance of positive momentum. Meanwhile, the small cap index is shying away from lifetime highs as it is merely 30 points away from its record high
· The index continued to march upward after surpassing two months high of 18200. In the process, multi sector participation prevailed backed by improving market breadth that augurs well for the Nifty to head towards revised target to 18600 in the run up to Budget 2022. Key point to highlight is that past 10 sessions 1125 points rally hauled daily stochastic in overbought conditions (at 96). Hence, temporary breather at higher levels cannot be ruled out. However, such a breather should not be construed as negative. Instead dips should be capitalised on as fresh entry opportunity from medium term perspective. Our earmarked target of 18600 is based on following observations: a) lifetime high is placed at 18600 b) since June 2020, on multiple occasions elevated buying demand emerged from five months’ average that paved the way to challenge lifetime highs in subsequent months. In current scenario the index rebounded after finding support from five months’ average that has consequently paved the way to ride move towards 18600 in coming weeks
Today's calls
Intraday – Bata India, HAL
Positional – D-Link, GNFC
For yet another quarter, tier II IT company Mindtree Ltd reported more than 5% revenue growth. In the December quarter, its constant currency (cc) revenue grew 5.2% sequentially aided by a strong broad-based demand environment and a steady ramp-up of past deal wins. In a post earnings conference call on Thursday, the company management said that it is confident of delivering industry-leading double-digit revenue growth going ahead.
Yet, on Friday the stock fell more than 5% on the NSE, falling the most among shares trading in the F&O segment, in the opening trade.(Read more)
The drugmaker on Friday said it has received a warning letter from the US health regulator for its Hyderabad-based Unit I, an API (active pharmaceutical ingredient) manufacturing facility.
The action follows the recent inspection of the facility by the US Food and Drug Administration (USFDA) in August 2021, the drugmaker said in a regulatory filing.
The company pledged to invest a massive ₹6 trillion ($80 billion) in Gujarat over 10 to 15 years for its clean energy businesses, as India’s largest fossil-fuel refiner seeks to extend its dominance amid a global shift to renewables.
India reported 2,64,202 fresh covid infections in the last 24 hours, the Ministry of Health and Family Welfare said on Friday.
Today's fresh cases are about 6.7% higher than compared to yesterday's figures. On Thursday, the country logged 2,47,417 new COVID-19 cases.
The active cases have increased to 12,72,073, the highest in 216 days, while the death toll has climbed to 4,85,350 with 315 fresh fatalities, the data updated at 8 am stated
The IT services company on Thursday posted a consolidated net profit of ₹437 crore for the third quarter ended December, up 34% from the year-ago period. The company's revenue from operations came in at ₹2,750 crore, registering a growth of 36% from a year ago.
The government is weighing the need for measures outside the Union budget to deal with any dramatic shift in the pandemic’s impact on the economy and livelihoods, two people aware of the development said.
Discussions on an economic response to the third wave of the pandemic, if needed after the budget presentation, has begun even as the finance ministry enters the last leg of budget preparations.
The idea is to be prepared with a strategy should the pandemic cause more-than-expected disruptions to economic activity and impact growth recovery, the people said, requesting anonymity.(read more)
Gold prices on Friday were poised for their best weekly gain since last November, as investors await economic data that could provide clarity about U.S. Federal Reserve's tapering policy, while a weaker dollar and Treasury yields supported bullion. Spot gold was flat at $1,820.08 per ounce. US gold futures edged down 0.1% at $1,819.50. The safe-haven metal climbed 1.4% so far this week.
Private equity investor Actis is in advanced talks to buy six road assets of Welspun Enterprises Ltd for an enterprise value of ₹8,000 crore- ₹10,000 crore, said two people aware of the development, requesting anonymity.
The BK Goenka-led infrastructure and energy firm’s road assets, which are up for sale, include five hybrid annuity model (HAM) roads and one build-operate-transfer (BOT) project, they said.(Read more)
Vedanta Group is willing to spend $12 billion to acquire India’s state-owned refiner Bharat Petroleum Corp., an asset sale that’s among the nation’s biggest and which has faced delays in completion.
“We’re not going to bid aggressively, but we will put the right price," billionaire chairman Anil Agarwal said in an interview to Bloomberg in Riyadh on Wednesday. “The market cap of the company is about $11 billion to $12 billion, so this is the amount of investment we’re looking at."
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